Mike and I have held off for many years buying new furniture or the latest TV.  Actually in our whole marriage we have only bought one set of living room furniture and have never had any kind of home theatre anything.  We have kept it pretty low tech around here.  So about a month ago, we re-did the whole family room. We didn't mess around.  We love it and we have dispersed the existing furniture to my office and the master bedroom which now actually looks like a bedroom!!
Here are the results (master isn't ready for photos yet, the walls are still pretty bare):

Now when we all watch TV there is enough space for everyone.

I love having the love seat in my office.  The kids sit on it and chat with me, or I can sit down and be comfortable while working on client sketches.  Yay!