ok so you've gotta 12' X 14' room...
pretty small, so lots of power shouldn't be a requirement.
I'd recommend small fullrangers, and the best quality tube amp possible. That should leave you enough for quite a good 5.1 or 6.1 preamp/processor ($700-$1000). I did a quick search and found one that is very good for as little as $325. For the centre channel, and the two (or three) rears, I'd go for something from 41Hz.com, build a three or four channel kit at what ever power you need. A four channel with power supply could be put together for under $200 or so. And T-amps sound very "tubey", and should integrate well with a 2 channel tube , "main" amplifier. A sub pair can be put together inexpensively from parts from
Apex Jr. . Perhaps allow $280 for a pair of good subs and plate amps...and 5 channels (say) of full-range drivers for $350 from any number of sources
That could leave you with $850 for a nice DIY tube main amp.
Some bargains can be had refurbishing an old tube integrated amp, or building a kit or purchasing some of the Chinese tube amps (some of which are excellent from first hand experience, but be warned, I am becoming a dealer for some of these so my view may be skewed a bit.).
I don't think there is a better way to do a home theatre setup using a high quality processor, good full-range drivers, 2 subs, 3 channels + of T-amp amplification and 2 channels of tube amplification. Personally I think it would completely rock. And play music too.
Personally in such a small room, I'd just go for a good pair of near full bandwidth (multi-way or single driver type) speakers, no surround, no processor, multiple speakers and amps. Just good 2 channel with fairly deep response, and a great DIY integrated amp (or amp pre-amp pair)
stew