7 or 5 speakers

You need to provide a lot more information. Are you just starting out or do you already have some equipment? How much are you willing to invest into your HT? Do you already have a surround sound processor? How many viewers will be in the room and where will they be seated? How many rows of chairs are you planning? How big is your screen? What kind of movies will you be watching? etc., etc...

If you are just starting out or have a limited budget, you want to put your money into five good speakers as opposed to seven cheap speakers. Remember that you have to power
each speaker with a separate amplifier, and good amplifiers cost big bucks.

You have a medium sized room that will seat three people in one row of rocker-recliners, or six people in two rows with the back row elevated. Four in one row is pushing it if you want viewers to enjoy the surround sound either 5.1 or 7.1.

The size of your screen will limit how many rows that you can have. A 50 inch screen will allow the front row to be ten feet from the screen. A larger screen may push back the front row into the second row of chairs.

Action movies require deeper low frequencies. I would recommend two 12 inch subs in the back corners or the front corners to establish a satisfying fast punchy bass.
To me that is more important than having seven surround speakers.

As you can see, there are a lot of factors that can determine whether you should get a 5.1 or 7.1 system.

as far as i know, you don't lose any information by going with 5 speakers vs. 7. the sound to the rears is taken from what is already going to the surround speakers if movie is dts or thx ex (dolby) 6.1. there are no 7.1 encoded movies to my knowledge and even 6.1 movies are hard to find. with 5.1 encoded soundtracks, rear speaker info is matrixed from the surrounds.
7 speakers may be worthwhile in your room if you have enough room behind the listening position to properly position the rear speakers.
most people i've spoken with including robert harley (tpv), feel that there is not much difference between 5 and 7 speakers. i've wired for the 6 and 7 speakers in my ht, but have yet purachase/install them. caught audio bug instead. i don't know anyone including dealers who have 7.1 systems, so i'm not speaking with any first hand knowledge.
as far as the sub goes, all i can say is that i run a single earthquake mkv 15 inch sub in a 19x45x9 room with no problem. subs volume at 25%. room is not enclosed. (opens to another room.)

aloha keith

In response to Redwoodgarden, the only speakers I don't have are rear and the possible side ones. Decoder is a Lexicon DC1, main speakers Mirage M3si. Rear and side amps are Adcom GFA 535. Seating position is 16 feet from front wall, so about 12-13 feet from screen.

7.

With the stock decoding algorithms on 5.1 sources, you get a bit more immersion from the side + rear surrounds. THX-EX encoded source will put sounds arround, beside, and behind you. Your Lexicon will also enhance pans from the front to rear speakers. My upgrade from 5.1 to 7.1 with a Lexicon DC-1 was worthwhile.

As far as the sub:

Home theater bass requirements for reference level LFE playback are ludicrous. Few commercial sub-woofers will not reach 115dB @ 20Hz @ 10% distortion.