I was a little bit busy and I couldnt followup this thread.
Sid, From your posts I feel that you have assumed that I am telling to cover all the 4 walls with acoustic materials. No I am not, even I was telling almost same as you were telling except the rear walls to have fully covered with diffusers. I am not an expert in this and I had written based on the knowledge gained through interactions with some of the Sound \ Acoustic engineers esp. some of the designers from GIK Acoustics.
What I understood and what I feel is that for an HT room (not a listening room) the entire front wall, side walls, ceiling, floor and back walls has to be treated for mid and high freqs except the side walls' end. The diffusers in the back wall will be useful if we have enough distance b/n the listener and the diffuser (atleast 6-8ft) else its always better having a dead back wall since the wall is very near to the listener (but in this case the entire side walls and ceiling will not be treated fully). For Low freqs all the 4 corners with bass traps (top to bottom chunk traps are more effective) and the 4 top corners with 3pointed traps and the middle portion of the side walls' top.
Only in recording studios specifically for music will have entire walls with diffusers as the scenario is different. I have seen (pics) several recording studios with full of diffusers front/side/back.
Sample pic of a well known recording studio:
http://gallery.avsforum.com/data/509/screenshot_0124.jpg. (Is this pure science or art, no idea

)
Another listening room :
http://img268.imageshack.us/img268/1228/palroom3.jpg
For listening rooms we need to have specific (can be DIY also, but based on some of the proven designs like QRD) kind of diffusers at strategic positions esp at the front centre and the side walls and back walls along with the basstraps. The above pic of the listening room will give you an idea. But using diffusers entirely is very tricky and complicated. Here the diffusers will act as sound breakers as well as reflectors.
For both HT and music, he suggested to have front walls, back walls with absorbers (dead back wall if it is near to the listening position) and treat the first\second reflection points on all surfaces along with the bass trap.
In most of the cases with 4 bass traps and side walls first and second reflection points will do the trick to a great extend. Then based on the room response for peaks and nulls, do specific treatment. But this will be a compromise for "purists" compared to dedicated HT rooms and listening rooms and when the cost is considered we have to take the decision which one to go for.
Following picture shows a sample setup from GIK Acoustics:
http://www.gikacoustics.com/images/room_layout_662.gif. Please note the distance from the listener to the back wall and the locations of the diffusers.