Hey there--thanks for the compliment on the setup. I had the same concerns about mounting the TV that high, especially since I have that large Meridian speaker under it. But I decided that putting the speaker above would be problematic for the sound and went ahead with the design you see.
We sit fairly far back from the fireplace/TV with an L-Shaped seating configuration. The couch that's opposite the TV is about 14' back so the viewing angle is barely noticeable (we do have the TV tilted down about 5 degrees). The other couch that's perpendicular to the TV wall is about 7' at it's closest point, and while you're definitely looking upward, it's not very radical.
As a point of disclaimer, this is our family room/dining nook/kitchen area set, so we don't use it for all our viewing. Most movies are on our downstairs plasma in a dedicated theater room.
I must say I really like having the set and speaker recessed--it definitely "fits" the room better. Let me know if you'd like a picture or two from further away to see the whole room.
