Depends on how much money you want to spend. Right now technology is in flux again. So there are certain things that I would spend first and others that I would wait for next summer or fall.
1. Spend on good speakers and subs first as to these are more resistant to change in technology.
2. Amplifier if you are going for seperate. Personally, I put money down on a receiver with both controller and amp, they are just as good for a room your size b/c it is appoximately the size of mine too. My house shakes with a Denon 3805. Presently, I am waiting to upgrade and am eyeing Denon's or Yamaha's next gen. If they are not to my liking in terms of quality and cost, I would look at others.
3. TV's, 1080p is the next gen but 1080i is OK b/c most new gen DVD format will be 1080i then is artificially upconverted to 1080p by the player. LCD's quality is catching up to plasma so you have choices. I have a Pana 900ae proj on a 3m wide screen and it is great. If you are able to control the lighting, you may entertain going with a projector and screen. Total cost will probably be equivalent but screen size is different with projector, larger with projector for the price.
4. DVD player is in flux, first gen Hi Def quality is not up to par yet according to review at multiple sites and mags. Getting a player that upconvert is the way to go now while new gen is being perfected.
That should be enough to get you started. Don't worry too much on interconnect and speaker wires. The difference on quality is negligible especially when you consider the distance it travels. Getting medium grade stuff is alright. Stay away from Monster cables!
