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Nothing wrong with that setup. As long as you don't mind an Ebay find center speaker... Matter of fact, here you go. http://www.ebay.com/itm/Sony-SS-CN101-Center-Channel-Home-Theater-Surround-Sound-Speaker-/111239331661?pt=Speakers_Subwoofers&hash=item19e6617f4d There is another for $24...

I know that. Those are just examples of what you already have...could be.

Until you know what those in-ceilings are...no I can't offer a "match"... They can be this cheap... http://www.amazon.com/Micca-M-6C--Ceiling-Speaker-Pivoting/dp/B0047PPR2A/ref=sr_1_7?s=electronics&ie=UTF8&qid=1387213233&sr=1-7&keywords=in-ceiling+speakers Through this...

Another alternative is the used market...depending where you live, can be a goldmine.

Yes...but new stuff can be had for not much money. If you could find out what the in-ceilings are, great...if not it can be worked around(their grills should come off pretty easily). Sony has the SS line of speakers(about the lowest price out there that is actually good). Issue there, Sony no...

By the way, what sources will you be using? Newer AVR can be had for under $150...if they have enough features...for your needs.

Option C(cause A is a dinosaur and B will destroy the in-ceiling speakers) Buy a newer AVR. Doesn't have to be "brand spanking new"...but at least have Dolby Digital...and preferable DTS as well.