A newbie building his first home theater (me) wants to know peoples' views as to whether it is better to place the screen flat against the wall or have it recessed "in" the wall. Anyone?

I've seen really nice theaters done both ways, I think its really just preference and the overall look you're going for.

A newbie building his first home theater (me) wants to know peoples' views as to whether it is better to place the screen flat against the wall or have it recessed "in" the wall. Anyone?

It depends on your objectives really. In my HT I wanted it optimized for two channel listening, so I needed to use a ceiling recessed screen in order to get close to the best aspect ratio and still have the screen match up with the speaker outputs when watching movies/shows/etc on the screen. If by, "recessed "in" the wall, you mean set into the wall but not much further away than if you did it flat on the wall, then I wouldn't see a big difference between the two. It is always better to have a screen that is permanently stable and stretched if you can do so and achieve all your other HT goals IMO, if you have a retractible screen you risk wrinkling and other issues, even when the screen is tensioned (though not as much so if it is tensioned, and even less so if it is tensioned and very large...).

The one advantage of a recessed screen is that if you recess it to the point of being flush with the BACK of the wall, then you're getting a bit of a shadowbox to help minimize light reflections onto the screen.

Bryan