Well. You may not be able to install a traditional home theater that includes a projector set up to project on a screen as it needs the room to be blacked out when you watch the movie. However, a LED TV with AV receiver and speaker setup should be still possible based on the size of your room. It's your preference. I would advise go for a dedicated HT room if you are investing more on the projector, receiver and speakers. If your investment is less then a living room set up is still okay.