Check your local paper, garage sales, Freecycle or Craigslist.org for free or inexpensive chairs. Often times there are a dozen or so free recliners every week. This is a great place to find them. If you can't simply place your pillows and blankets down, like a drive in.
Go to your local movie theatre, movie store, or rental store and ask them if they have any movie posters. Nine times out of ten, these stores have a backlog of movie posters. Sometimes they sell them for 50 cents to a dollar, but if you ask, they will most likely give them to you. If you can't get any, print some pictures of famous scenes and actors off of the Internet.
Go to a store and buy blank tickets. This can be a fun way to spend some family time together, by having each kid have to present a ticket at the door.
Paint the walls the color of your choice, but make it a dark color, like a deep red. It will look nice when the light is on, and when you turns the lights off, it will be dark, so your focus is on the movie and not the shadows on the walls.
Position your chairs side by side, adding if possible a place for soda and popcorn.
Use your regular TV, rent a big one, or borrow a projector. Many times, churches have one. If you belong to a church, they may be willing to lend it to you.
Place the movie posters and pictures all over the walls.
Roll in a stand and place your microwave on top, so you can always have fresh popcorn.
Gather together as a family, put in the flick and enjoy!