Paint the room a neutral, flat color that does not reflect light. Hang blackout curtains on the windows for daytime movie viewing. Lay thick carpet that will absorb sound and reduce echoes.
Decorate the walls with framed movie and TV posters, or cover a wall with album covers or vinyl records.
Install a big-screen, flat-panel television and add surround sound. Place the TV in an armoire or entertainment center if the room will be used for other purposes besides media. Connect a DVD player to the television.
Hook up a stereo system that uses the same surround sound speakers as the television. Include a turntable if you have a vinyl collection. A multi-CD changer reduces the number of times you'll need to switch out discs.
Use dimmer switches to control the lighting. Consider using a remote to control at least one lamp in case you need light in a hurry.
Set up stadium seating consisting of risers with comfortable chairs on them if the room is used exclusively for media. If not, furnish the room with sofas, recliners and beanbag chairs for the kids.
Create a kids zone with cushions and pillows. Set a low table in the kids' area for snacks and drinks. Keep an area free for Wii or other video games like Dance Dance Revolution.
Build a bar with a mini-fridge and a sink for cleanups. Buy a nacho maker or a popcorn machine from your warehouse club for movie nights.