How do I improve a room with a low ceiling?


I will be finishing a basement in the next few months and want to use the room as my main stereo room (maybe with a TV in the future) and a once-a week work at home office.
The room dimensions will be 21'L x 16'W x 7'H. I am concerned that the low ceiling height will hurt the sound and thought I saw somewhere on-line about ceiling treatments that effectively make the room sound "taller". I have skimmed over the links I've found on Agon but they seem to be dealing with other room treatment issues or don't really get into how to correct for low ceilings.

I plan on having drywall ceilings and there will be some space between it and the upstairs floor and joists that I could probably install some kind of sound-altering material. (I don't know if I want something to absorb, diffuse, or reflect the sound.)

The floor will be some kind of tile or wood with an area rug or two (the wife is not sure yet, but is also flexible on this).

So I am looking for guidance from someone that has experience with solving this type of problem.

Equipment:
Parasound Halo A23
Parasound Halo P3
VTL 2.5 (bought used and waiting for the new room)
NAD M55 CD/SACD
Magnepan MG12s
REL R205
Music: jazz, pop/folk(?), alternative, 60's rock, and some classical - usually at moderate volumes

Thanks in advance for any help you can provide. (I apologize if I only get back to reply every few days - sometimes work gets to be way too much!)
1nglen
consider not installing sheetrock to the ceiling joists, exposing the joists. then the true ceiling plane will be a foot or more higher, depending upon what depth joist you have. i have an 8.5" hight to the bottom of my wood trusses. i took the sheetrock off and installed a layer of black insulation at the bottom of the plywood deck at elevation 12.5 feet above the floor. the black insulation, 1.5" ductliner, is a fiberglass acoustic insulation product used for dampening noise in the air conditioning indsutry. the insultion gives the effect of a room with an even higher ceiling. the truss elements diffuse the sound as well. look at the photos in my system link. look carefully at the ceilng.
I believe a low ceiling (9ft or less) is an advantage. Speaker drivers need to move air. More air to move means less effeciency, and a lower quality sound reaching the ears, while "half" the sound floats uselessly to cathedral heights. (Vertical dispersion? Who's up there?) Given a good combo of speakers, room size and components, one can get the barest hint of overlapping and reinforcing harmonics. So, unless people have very powerful components and speakers such as Pro Ac D80's, the question should be about compensating for a high ceiling.
Using products like the Ready Acoustics panels or GIK or other similar products can really make this problem disappear. Once I added some diffusion panels from Auralex and the GIK panels I solved the problem.
I like the no sheet rock idea but coul look cool or bad. Anyhow I would just put acustic pannels up to take care of the first order reflection on the celing. Since you are remodeling the room you may be able to do something creative and make it flush with the celing. In my old house I used a flush mount dropped celing and replaced the tiles with acustic panels in spots, worked quite well and looked awesome. You didn't notice them unless you looked and the celing tiles where great when I added stuff to the house I still had access.
Some folks just attach fabric across the ceiling joists to give the appearance of there being a ceiling, but the fabric is acoustically transparent, giving the sound of a higher ceiling. You can then choose to stuff the area between the joists with absorbent material in whatever amounts/locations sound best without worrying about the looks, since the fabric will cover it anyway.