Why the basement is the right room
A projector needs a dark room, and a basement gives you one for free. Concrete floors keep the subwoofer from rattling the house. And because the theater sits below the bedrooms, a little insulation in the ceiling goes a long way toward keeping movie night out of the kids' rooms.
The usual limits are ceiling height and ductwork. A low soffit can decide where the projector hangs and how tall a back-row riser can be, which is exactly why I want to see the room while it's still studs.