Cool - so you're buddy is probably right about the rectangle being easier and preferable for acoustics. Sounds like you're looking for a pretty serious dedicated space, which is awesome.
Does that mean you are left with approximately 16x21? That's workable for two rows of 4 pretty nicely. How high is the ceiling? Looks like a pretty standard 8' in the middle of the room - or is it higher? Are the sloped ceilings and knee walls at the ends of the 21 foot length? If that's the way it's laid out, the effective length is going to come down some - it should still be workable, I think.
If you really want it to be high performance (to get the most out of the equipment you buy), now's the time to think about sound isolation (soundproofing), which has two basic uses: keeping the sound of the movie from bothering the rest of the house (or the neighbors) - meaning you can use it whenever you want; and keeping outside sounds out - preserving the sense of immersion and keeping you from needing to work the remote to move the volume up and down when the quiet parts are too quiet (so you turn it up) and the loud parts end up too loud. There are drawbacks to consider - extra costs for materials in soundproofing, and the extra attention that you'll need to pay to ventilation, both for the sake of preserving the isolation as well as keeping a tightly sealed room form becoming and sauna when six or eight people sit in there for an hour or two. If you want to go down this path, we need to put the equipment considerations aside for a little while and concentrate on getting the construction right for those aspects, since you won't redo it later, and the techniques and materials are non-standard. Also, it looks like this is an upstairs space - what's below and adjacent?
Assuming all of that is handled to your satisfaction, let's talk gear.
"Speaker placement & wiring
Best affordable speakers (in wall preferably)
Best affordable 3D projector
Pros & Cons of AT projector screens
Build a screen or purchase?
Audio & HDMI wiring"
For most everyone, especially on a budget, you should place speakers around your main listening position, following the recommendations of THX
(which are very similar). When you go to calibrate everything, basically forget what the sound is like in other seats - just work it out for yours.
Wire doesn't need to be special, it just needs to be of a reasonable gauge (AWG) - 14AWG is common for most rooms of this size, but if you are concerned, you can go for 12AWG. You're probably actually good with 16, or even 18. Roger Russell's website
has this great table, explaining what wire gauges are required to avoid any wire related difficulties, given wire length and speaker impedance. Most speakers will be 8Ohm, but it might be good to plan for 4Ohm - shop for speakers before you run wire, if possible.
Shopping for home theater speakers is not quite like shopping for Hi-Fi speakers. Don't go to some fancy shop, and I personally wouldn't read too many reviews. It doesn't make much difference if some reviewer says these speakers are "airy" or "warm" or whatever else. You're looking for speakers with high sensitivity (loud) and hopefully good off-axis response (controlled directivity). Typically, it's hard to find affordable speakers with high sensitivity and power handling that use dome tweeters, so you should expect things like waveguides or horns and compression drivers. That's not a rule, but just an observation. High sensitivity and power handling means that loud sound effects come through with impact and without distortion - it makes gunshots and explosions sound natural. I wouldn't consider loudspeakers for your space with sensitivity lower than about 92dB (that means 1 watt of power from the amp makes 92dB sound pressure when measured from 1 meter distance) Check out this website to see what kind of amplifier power is needed to reach reference level from a speaker with a given sensitivity. http://www.kvalsvoll.com/Articles/AudioCalculators.htm
There are a few good internet direct manufacturers of loudspeakers you should check out, like HSU research
- they make in-walls you should consider. Right now, I can't come up with other in-walls that I feel confident will fit in your budget. Triad
makes very good stuff, including in-walls, but may price you out. Maybe check out Chane Music and Cinema
. Honestly, I have trouble recommending a budget speaker that isn't home made. DIYSoundgroup
(a group of mostly forum members here) have the best value going for home theater speakers, but there's not really much for in-wall, and you have to build them yourself (which is easier than it sounds)
For projectors, don't be afraid of used, but the 3D capabilities are developing very fast, so the best 3D projectors will be new. I don't keep up with which are best for 3D, but the big players are Epson and Panasonic, with JVC and Sony being the higher-end with Optoma making a lot or quality budget units. For me, the things to consider are brightness and flexibility. Have you considered a cinemascope screen format? 2.35:1 image ratio is very common for big-budget movies, and is intended to be wider (and therefore bigger) than more traditional 1.85:1 (or the similar 1.78:1 HDTV ratio). If you want to be able to project blockbuster movies extra wide, as they were intended, instead of the same width but less tall (with the black bars, like you would see on a TV), you need either an additional anamorphic lens (usually a couple thousand dollars) or a projector with enough zoom range so that you can zoom in enough for the 2.35 image to be as tall as the 1.78/1.85 image. Technically, a 1.33x zoom will do this, but for a little placement flexibility, you'll want at least 1.5x (2x would be better). And if you're going to zoom, consider power zoom and lens shift, as well as power focus, as they will make the transition from 2.35 back to 1.78 easier - even easier is a projector with memory settings so that you can just switch back and forth with a single button - Panasonic and JVC I think are the only players with those features (I think, but maybe Epson has added them?)
AT screens have only two (small, IMO) drawbacks, when set up properly. First, if you sit too close (usually within 10 feet), you might see the weave or perforations. Second, the woven fabrics won't have more than about 1.1 gain. If you need a really bright image, or have a dim projector, you'll need a screen with some gain. To me, if you have the space to put speakers behind the screen, you can usually work around the potential drawbacks of AT screens, and it's worth it, IMO. I would build. The cost savings are huge.
Wiring is a big topic, and there's lots of things going on to consider - like automation, remote control, redundancy, future-proofing. It's getting late, so let me direct you to a very helpful post in my build thread. http://www.avsforum.com/t/1372262/the-once-and-future-theater/690#post_23667860