A single rear speaker behind your head is a bad idea because it can cause back-to-front reversals. It's a well researched and documented psychoacoustic phenomenon where sounds along the centre line can sometimes appear to reverse direction momentarily. Sounds along the centre line are heard equally in both ears, and it can sometimes take our ear/brain mechanism a moment to figure out whether the sound is in front of us or behind. This is not a problem with a single centre speaker directly in front of us, where our hearing is at its absolute best and we have visual cues. However, it can be a problem with a single speaker directly behind, where our hearing is not so hot.

The solution is as simple as it gets: simply use two rear speakers, placed well away (at least 30 degrees) from the centre line. This is one of the primary reasons why Dolby and DTS and THX all recommend using two rear speakers, even for the mono surround-back channel of EX/ES soundtracks. Note that this is the only channel where it is recommended that two speakers be used for playback.

If you check the Dolby, DTS and THX websites you'll notice that none of those companies refer to the third surround channel as the centre surround or centre rear or 'centre' anything; instead calling it the surround-back channel. More than just semantics, the contents of this channel are supposed to image from behind you in general, not specifically from the centre of the back wall. Another good reason to use two rear speaker (7.1 instead of 6.1).

Like you, I too feel that dialog intelligibility is most important when watching a movie. The last thing you want is for surround-back information to image directly in front of you, right where the dialog is. Going beyond a 5.1-speaker set-up has three immediately noticeable benefits. Better envelopment; four surround speakers wrap around you better that two can. More distinct localization; you'll clearly hear surround effects to your right, to your left and behind you. And greater stability in the surround field; no matter where you're sitting on the couch, sounds intended to come from behind you always appear to come from there - not some side-ish, rear-ish direction. No magic involved, simply a pair of speakers physically located behind you (makes it hard for those sounds to come from any other direction).

All of the above is difficult, if not impossible, to do with only two surround speakers, where you're relying much more on phantom imaging (inherently unstable, moving when you move). The best surround speakers can't be in two places at once. Size doesn't matter. Wait, let me rephrase that: room size is not as important as where the listening area is. For example: you may have a very large room but, if the couch is against the back wall, you won't be able to properly set up a 7.1 system because there will be no room behind you for the rear speakers. If your seating area is away from the back wall, then you have the makings for a good 7.1 layout.

Sounds along the side walls should come from your sides, sounds from the back wall you should image behind you. This directionality should remain consistent, whether you're watching a movie in a large auditorium or a cozy living room. Your 17 foot long home theatre is plenty big to accomodate a 7.1-speaker set-up and enjoy its benefits.

Good Luck,
Sanjay