You've got a nice budget to work with. At that price point, you could even go with the 970/7125 - it's an extra $700, but it would give them some flexibility in upgrading later. A nice dedicated room like that could lead to more interest in upgrades down the road than a simpler living room setup. The Studio v3's would certainly take a big bite out of what's left, but a Rocket or Axiom package could be a good fit while leaving you enough for the projector and all the assorted extras (screen, cables, universal remote).