Advice for New AV Receiver and Speakers for new LCD HDTV....

Greetings,

So I broke down and splurged on a new Samsung 55" LCD HDTV LN55B640 and will be picking up a PS3 for fun and to use for Blu-Ray Discs. My old Pioneer receiver (which has worked great for me for over 5 years) doesn't have HDMI so I'd like to get a new one to finish off the new set-up.

My HD Cable Box will be hooked up via HDMI and will hook up my Wii via Component A/V. Also have my current Sony DVD player that I'll plug in so my younger niece & nephew can watch DVD's w/o touching the PS3 and for CD's as well I guess. I reckon the PS3 will last longer that way heh.

The receiver and speakers I'm thinking of grabbing are:
Pioneer 840w 7.1 Receiver: VSX-1019AH-K
Sony 10" Powered Subwoofer: SAW2500
Sony 5-1/4" Dual 2-Way Center Channel Speaker: SSCN5000
Sony 5-1/4" 2-Way Bookshelf Speakers: SSB1000
Sony 8" Bookshelf Speakers: SSB3000
- or -
Sony 8" 3-Way Floorstanding Speakers: SSF5000

Not an audio guru, so one issue that I'm still trying to work out is about the size of my apartment living room. It's 12' deep from face of sofa wall to face of TV wall and just over 14' long. With this space being on the smaller size than a typical family room, I'm wondering how to place/fit in 2 additional speakers when going from 5.1 to 7.1. Are they supposed to be placed between the front and rear sides or at the back as well? Could I possibly just set the additional speakers on top of or next to the rear speakers?

Would I really miss out that much on higher res audio if I use a 7.1 receiver in 5.1 configuration (can they even be set up that way).

Not concerned with iPod connections or multizone setup or satellite radio features currently.

If it's not worth upscale converting the Wii signal from component A/V thru HDMI and/or if 7.1 overkill for my room, then I can get a lower model I suppose.

As for the speakers I'd like to get with the receiver, will there be a problem using that subwoofer (listed as 100watts but the receiver puts out 120watts x7).

Also is there a big difference in using the 8" bookshelf speakers to flank the TV at the front over the 8" floorstanding speakers at the front. The 8" bookshelf speakers are not meant/can be for rear speaker use as well are they?

Any info/advice is really appreciated and thanks...