Plasma screens blow.  They can\'t produce blacks worth crap.  They look grey.  Front projection is the only way to go.  No problems with viewing angles.  Nothing can beat it.
I would probably go for the stereo.  The speakers I want are 8 grand a piece so if you are willing to fork over about 20 grand I will do that.
As far as my entertainment center goes, I have a regular tv on a Bell Ogetti entertainment center.  DVD, Laser Disc, PS2, VCR, CD, Yamaha 992, HD-DSS Receiver are all there.  If you look in one direction you view the regular tv, but I have a Front projection unit that fires to the left wall.  I have one couch facing one tv and one couch facing the wall for the projection.  I only really use the projector for HD, movies, and PS2.  Eventually when we build a new house the projector will get it\'s own room.  

But for now it just sits on the floor.