Complete system for 10k (Audio+video)

A good challenge, indeed. The hardest part, cost-wise is the video. Some ideas:

Mitsubishi Diamond 55" HDTV ready for around $ 4,500 new.
Yamaha DSP-A1 integrated amp used for $ 1300. (110x5, 35 x2)DD,DTS,etc.
Adcom GFA-6000 5 channel amp. (100x3, 60 x2) used for $ 450.
Toshiba SD5109 new on the web for $ 699. Progressive scan.
Phase Tech PC-500 towers w/12" powered subs. $ 1,000 used.
Phase Tech Center Channel. $ 300 used.
Phase Tech Power 10 powered subs(2). $ 500 used.
Phase Tech Power 15 powered sub.(1). $ 400 used.
Phase PC Surrounds for rears. $ 200 used.
Phase Tech DTS for front effects. $ 125 used.
Tributary cables and connects. $ 500 new.

This comes to around $ 10K w/tax. The Adcom's solid performance augments the Yamaha's power amp section, not horrible, but certainly not it's forte. This over-engineering allows you to keep from running out of power or overheating the amps.

Alternatively, I would look at a B&K AVR307 to replace the
Adcom and Yamaha for the same $, used of course. But I like the idea of combining the preamp/signal processing section of an HT integrated or receiver with a power amp. Counterintuitively, you actually get more bang for the buck. Go figure. That is because you can get excellent power amps for not much. (B&K,Outlaw,Adcom, etc.)

The system is able to create great spatial effects on good
DTS or Dolby Digital DVD's. The picture is razor sharp on
film. The ability to reproduce low bass in my less-than- ideal space(26x11x8) is as good as anything I have heard. And on music(remember that other stuff we enjoy?), just the using the main towers in Effects Off mode produces very listenable sound with good recordings. And the Jazz hall DSP effects with the Jazz Masters Series CD's actually sounds warm and magical without much veiling that DSP tends to overlay on most music. Not the most forgiving system, like, say, my Vandy's, but can sound warm and real with good discs. I use the Toshiba for CD's as well as DVD's. If you put on BoyZIIMen's DTS recording of Yesterday, you and anyone else hearing it will have a religious experience.
I have actually heard this system extensively BTW.

As far as deals I have seen recently on Audiogon, someone was selling a JMLAbs HT speaker setup for $ 3100. No one
will imagine you got out for only ten with these in the audio chain.

As a Vandersteen owner for many years, you could not go wrong there either, although I would probably look at some other subs. Lots to pick from out there for under $ 1,000 used, and even new or demo.
My strongest recommendation is to have several powered subs in the system if you are to do justice to good HT soundtracks. You haven't lived until Nicolas Cage turns over the engine on a Cobra and it feels as if the car, not
the image is ten feet away. Or you hear a helicopter in the Bone Collector go OVER your head, and you know there are no speakers on the ceiling. Or your house is depth charged in U-571. Or... you get the idea. Bass isn't all important - unless it's missing. On music some of us don't care as much. On film, you really need it. Good luck!
If this is to be your only music system, you may want to
lean towards refinement over brute strength. In that case,
you may want to suck some $ out of the video and buy a better front end. I probably would rather see you split the front end into at least an amp and processor than just a receiver(B&K suggestion notwithstanding) so that you can affordably upgrade or simply try other gear. As formats are still changing, try to keep an open topology. I think B & K let's you retrofit new formats easily. And faster subs like the Sunfire or Velodyne will blend more seamlessly on music.
Good luck.

Prs123, my my, you are up to the challenge. When we got our TV, we got a theatre wide format, because it drove us nuts trying to read the fine print on the DVD's and we don't like the black bars. Any suggestions for theatre wide in your suggested list? Angela

I'd go for something like the following:

Mitsubishi or Pioneer Elite HDTV-ready, 16x9 55" screen for around $3800 (new, discounted).
Denon AVR-4800, $1200 (on ebay or Audiogon, maybe B-stock)
A progressive scan DVD player ($600ish) probably Toshiba.
A combo DirecTV / Tivo unit with dish ($400 new)
Leave about $350 for cables - 12ga wire from Home Depot for speaker wire, decent Tara Labs or Monster cables for interconnects.
That leaves a little over $3500 for speakers. I'd look for used, and I'd choose speakers that could be driven effectively by a receiver. Since so much of that is dependent on personal taste, I won't pretend to tell you which one to buy, plus listening and deciding is 1/2 the fun. Some brands that would work well and you could buy a nice version of include: Paradigm, NHT, PSB, Definitive Tech.

In my opinion, putting together something like that would seriously WOW almost anyone who experienced it, including you and your family members.

That said, there are a few considerations that would quite possibly cause me to alter my recommendations, including:

How much time listening to music vs. watching movies (those are nice TV sets I'm spec'ing)
Is $10K your lifetime limit, or would you likely be willing to spend some more to improve it in a year?
If you were going to improve it, would you want to only add to it, or would you want to upgrade pieces?

Best of luck in your choice.

Prs123, 16:9 was exactly what I meant. Thanks. You do have the knack for this. I wonder if there's a consulting market out there?