Here it comes! (Video at the end)
So this is how I started earlier this year, with two bookshelf speakers and a subwoofer from a company called The Loudspeaker Kit. The TV rack is half wedged into a corner, with the fireplace blocking it from sitting flush with the wall. Huge amount of wasted space just to accommodate a TV and a PS3, plus the area below it is too fractioned to use. The AVR sits on top of a cardboard box, wires crisscrossing everywhere and the fireplace boarded up to stop draughts from coming into the house. The tile hearth is a problem - It's bumpy and too narrow to place anything flat on.


This is how it is now, with an upgrade to 5.1, all with speakers from the same company as before. I built a pine plywood stage over the tile hearth that runs the entire length of the wall, with MDF and oak veneer trim. The idea is to blend it into the surrounding materials, but I left the trim unstained due to a request from my mom. The stage sits on top of a foam underlay to prevent rattling and vibrations from travelling to the floor. In the corner is a rockwool broadband absorber to treat some brightness and boominess, as well as cultivate some symmetry as the right side of the room has a big opening to the dining area. The TV sits on a custom rack designed to fit this particular TV and centre speaker...
...with a lower shelf for DVD/BD cases.
An aluminium rail is embedded into the stage to allow the rack to roll left and right on wheels. Why?
To make way for the fireplace!
Since we have a central heating system I decided to convert the fireplace into an AV rack. I cleaned out the ash (which took an entire day, phew!), re-paved the concrete, coated the interior with masonry sealer and dusted it with a chemically treated silica powder to prevent mold and insects living there. Then I boarded up the walls with plywood and constructed the rack itself with solid pine. Since the fireplace was built to imprecise standards, all the dimensions had to be measured at multiple points to ensure a good fit. The bottom panels had to be foam padded and shimmed as well to get it nice and level. A top panel caps the fireplace off and stops cool/warm air from leaking out. If you look closely you'll see I designed a few gaps for cable management. A hidden nook beside the AVR houses the power board, and remote-controlled cold cathode lamps in a recess for light.
All this including the stage and TV rack are finished in a high wear flooring polyurethane.

Because the TV rack now impedes line of sight to the AVR, I installed an IR signal "bender" that takes IR signals and repeats them along a cable lined with IR LED's. This enables the AVR to be controlled when the TV rack is in the centre position. The PS3 using bluetooth technology of course doesn't require this.

The speaker finishes. The 4 speakers on the stage alternate between teak and worn white. Since the kit speakers don't come with any identifying features, I sprayed the logo on them instead. Gold for teak, black for white.

A little cable management, and the remote control wall socket that acts as a master switch for the whole system.
I worked with my mom to produce these wall cushions for the ottomans, as the wall was a little uncomfortable to lean against. These also help reduce the first reflections just a little.
The lampshade from this light was removed when we moved in 3 years ago because, well, it was ugly. Again I custom built a Japanese style lamp with shellacked solid timber and paper-lined perspex. Notice in the background I mounted the acoustic panels on the picture railing with hooks, which makes for a much neater look.
Just a picture of the speakers in progress

In a pinch, the room can be temporarily retrofitted with a projector + screen setup and 7.1 sound. In the future I plan to install a ceiling - mounted dropdown screen so I can switch between the TV and projector.
Equipment:
Panasonic Viera 32" 1080p TV
PS3 Slim
Denon 2807 AVR
LSK TL6 Mains
LSK C6 Centre
LSK S250 Subwoofer
LSK M6 Surrounds
LSK M4 Rear Surrounds
Thanks for reading, and I leave you with the build video for my 5.1 home theatre
(Do me a favor, watch in HD)
http://youtu.be/3BG__0qsO9s?hd=1