OK...I do agree with your definition more, Anthony.

If all seats face the front, that's good. Theater seating is nice, but if you like couches better, so be it.

Certainly it can be used for those other purposes. A spare bedroom is actually not a bad way to use the space.

However, I don't agree with people who call their living rooms with an LCD over the fireplace a home theater. If it's a living room, then it's a living room, not a home theater.