I think this is actually a pretty good room for a HT! Are you planning to go with a front projection system? If so, you could easily put a 100" screen on the wall with the window and place the sofa a couple of feet from the bathroom wall. This would give you the possiblity of setting up 7.1 sound. The closet under the stairs sounds like the ideal place for your equipment rack and it looks like you would have easy access from the back for hooking up wires, etc. I can't wait to see how it turns out!
Watch for Home Theatre 2.0 pics coming soon!