This is my home theater. The pictures are terrible because I took them with my laptop, but you can get the idea.
We weren't using the children's playroom much anymore so a few years ago we converted it into a theater.
We knocked out the closet, replaced the single door with double doors, added hardwood floors, changed the lighting.... and this is what we ended up with.
Leather sofas, chaise and ottoman - Restoration Hardware (they don't have these exact pieces anymore but they are by Mitchell Gold so try there if you're looking for chesterfields. Mitchell Gold make a lot of furniture for both Restoration Hardware and Pottery Barn, so it is a good place to look if you see something you like but maybe want it in a different fabric.)
Moss Ball in pot - Scotts Antique market
Leather tray on ottoman - Ethan Allen
Paint - Ralph Lauren Leather
The theater part only takes up half of the room, we also have a bathroom, table for games, fooze ball table etc.
My favorite part about the home theater is that the remote even controls our lighting. I just love to dim the lights as the movie starts, it makes me feel like a big-shot!