Design
Today, "home cinema" implies a real "cinema experience" and therefore a higher quality set of components than the average television provides. A typical home theater includes the following parts:
Input Devices: One or more audio/video sources. High quality formats such as HD DVD or Blu-ray are preferred, though they often include a VHS player or Video Game Systems. Some home theatres now include a home theater PC to act as a library for video and music content.
Processing Devices: Input devices are processed by either a standalone AV receiver or a Preamplifier and Sound Processor for complex surround sound formats. The user selects the input at this point before it is forwarded to the output.
Audio Output: Systems consist of at least 2 speakers, but can have up to 11 with additional subwoofer.
Video Output: A large HDTV display. Options include Liquid crystal display television (LCD), video projector, plasma TV, rear-projection TV, or a traditional CRT TV.
Atmosphere: Comfortable seating and organization to improve the cinema feel. Higher end home theaters commonly also have sound insulation to prevent noise from escaping the room, and a specialized wall treatment to balance the sound within the room.
For more discussion on home theater design and construction you can visit Home Theater Systems, Electronics and Forum: HomeTheaterShack.

Home cinema, also called home theater, seeks to reproduce cinema quality video and audio in the home.
Technically, a home cinema could be as basic as a simple arrangement of a television, DVD, and a set of speakers. It is therefore difficult to specify exactly what distinguishes a "home cinema" from a "television and stereo". Most people in the consumer electronics industry would agree that a "home theater" is really the integration of a relatively high-quality video output with surround sound.