Yyz:
I think your 3-channel idea will work fine, given the size of your room. You may miss some of the special effects surround stuff, but there are times I think that aspect of HT is quite over-rated.
The sole suggestion I can offer is to get a better pre-pro than the Outlaw, given the quality of the rest of your system. A home theater pre/pro that handles both music and voice accurately adds a lot of enjoyment to the overall experience, so I'd give some additional consideration to getting a pre/pro that is more commensurate with the rest of your system. There are a lot of threads in the A-gon archive about good pre/pros that are reasonably priced (particularly used, such as those made by Rotel, B&K, and Adcom. For a bit more money, you could also get a Bryston SP-1 (now superceded by the SP-1.7), which is an excellent unit that should be available for less than $2k.
I think your 3-channel idea will work fine, given the size of your room. You may miss some of the special effects surround stuff, but there are times I think that aspect of HT is quite over-rated.
The sole suggestion I can offer is to get a better pre-pro than the Outlaw, given the quality of the rest of your system. A home theater pre/pro that handles both music and voice accurately adds a lot of enjoyment to the overall experience, so I'd give some additional consideration to getting a pre/pro that is more commensurate with the rest of your system. There are a lot of threads in the A-gon archive about good pre/pros that are reasonably priced (particularly used, such as those made by Rotel, B&K, and Adcom. For a bit more money, you could also get a Bryston SP-1 (now superceded by the SP-1.7), which is an excellent unit that should be available for less than $2k.