My room is 14x18 and I can barely fit 8 people. No way you'll get 15-20 unless you put in regular theater seats (the skinny ones, not recliners) in at least 3 rows.
The thing with analog vs. digital is that it's best to match the cable type to the display type. Since CRTs are analog, they can take an analog component video input and display it quite well. Conversely, a DLP can take a DVI or HDMI input and display it digitally. The best analog/digital conversion is NO conversion. But component won't support HDCP copy protection, so even on analog CRTs you still need a DVI/HDMI input that supports HDCP for future compatibility. Might not be as good a picture as the component but with HDCP you won't have a choice.
I'd agree with Richard about the front projector, or go with a 65" DLP RPTV.
Also, make sure you put in scene control lighting - easy to do when the room is built. I used the Leviton Mural Scene controller and dimmers.
I used 4 leather recliners on the first row and put 2 actual theater chairs purchased from Ebay and installed on a 8" platform on either side behind the recliners. Works great.
