goomz,

I ran a 5.1 system for about three years before finally adding the rear surrounds. My couch is only slightly forward of the rear surrounds but the difference in overall performance was definitely worth it. IMHO it completes the soundstage for any 5.1 source by using PLIIx to morph the rear surrounds. I believe that the LOTR movies are in 6.1 Dolby EX so you should really hear the difference there.

All of my CD listening is in two channel and my SACD is set up 5.1 but I am using my rear surrounds instead of the normal surrounds so the depth of the soundstage is much deeper.

I would suggest just going 7.1 now and then you are ready for might just be coming in the future.