How to diagnose the need for room treatment?

Try playing something that should have lots of bass. If your system should be able to play deep bass and you can hear it, and are happy with it, you are probably be OK.

If the bass is lacking or muddled, you may need bass treatments in the corners of your room.

You've played with speaker position and you've dealt with the first reflection points (including floor bounce?) and in your opinion it sounds good. If that's the case, then don't go any further. It's not that you couldn't improve the sound quality, but go to the above websites graciously listed by Rodman and look at the products they offer. Then ask yourself whether you really want them in your living room? I suspect the answer will be self-evident.

I beg to differ with the last couple of responses. If you'd really like to get the best sound possible from your setup, you really need to make an attempt to gain a solid understanding of how your gear, room acoustics, speaker placement and seating placement are interacting.

Get a cheap spl meter from Radio Shack and a cd with test tones from either rives.com, a website or a Stereophile test cd. Place the meter on a camera tripod where your head is when you sit in the sweetspot. Measure the response using the test tones (search archives here on how to do this exactly), and graph them on the chart you can download from rives.com.

If you play with speaker and seating placement & remeasure, you will be able to significantly affect in room bass performance. Often you will have peaks at some frequencies and troughs at other frequencies. Offer, you have to live with tradeoffs to get the best overall balance. Bass traps in the corners behind the speakers offer the biggest improvement in most situations. the room acoustics forum on audioasylum is the best place I've read up on this topic.
Good room treatment doesn't have to cost tons or look like hell. Natural fibre rugs, velvet curtains, upholstery and bookshelves can all contribute to improved sonics if diy or commercial room treatments aren't in your budget or to your liking.
Don't let anybody fool you. The room is probably your most important component. Cheers,

Spencer

If you have a significant-other's-acceptance issue. There are very attractive alternatives to the pro-sound booth type traps/treatments. Some of which actually allow you to submit your own artwork/photographs for display, while still effectively controlling your room's acoustics: (http://www.asc-hifi.com/panel-trap.htm) (http://www.purewaveaudio.com/c=bdYyIFF0rsQhnkyyRIpP7ioV5/product/AUR-SPS23/Auralex_24x36x1_SonicPrint_Panel_Uses_Movie_Art_Image_from_Auralex.html) Of course- How far you pursue excellence in your listening room depends solely on how serious you are about your music.

Another option if you have a PC is Room EQ Wizard (for PC and free - a vry cheap solution) or Fuzzmeasure Pro 3 (for Mac $150) - you'll need a measurement microphone and a pre-amp like a Dual Art USB pre and off you go - measure to your hearts content.