In-wall or in-ceiling subs have a huge disadvantage of not being able to be moved to deal with standing waves. It is hit or miss with the location you pick for permanent installation. A standard sub in the same price range should totally outperform the inwall sub if you place it properly.

benpup: we have used this inwall package many times with outstanding results. 3 Definitive Technology UIW75 front inwalls (same dual 6.5" woofers and tweeter used in the $3000/pair flagship towers!), and 4 UIW BP/A bipolar surrounds. These bipolar inwalls have two woofer/tweeter arrays each angled in a slightly different direction. Does a great job of balancing direct/reflected sound.

$950 for the fronts and $950 for the surrounds. Add the Definitive SuperCube I or similar for $1200. With install and cabling, this package would come in just under your budget!

Now we are getting somewhere. Skip the idea of an in wall sub unless your wife says no F***ing way on the floor standing unit.

Now how do we spend $3,500 in a room that we don't know the ceiling height - we'll assume 8' leaving a room with aove 3,000 cubic feet since its open to the kitch.

Choice (1) Definitive Technology. Use (3) UIW75 in walls for the left/center/right, (1) pr UIW64A in ceiling for side surrounds and a single UIW DSC5 in wall rear surround. Top it off with a Supercube I subwoofer. Retail's at $2,785. Allow $100 for cabinets to be made for the in ceiling stuff and about $700 for install. Should be doable. Caveat - the in walls are on exterior walls. Allow some extra for treatment if they are not exterior or well insulated. Recommend Sonance Sonafil if not.

Choice (2) Mirage. (3) InCognita HDT-WM& in walls (They include acoustic treatment for the wall cavity), (1) pr HDT-CM1 in ceilings and an OM-200 sub-woofer. Retails around $3,200 which doesn't leave much for install.

Choice (3) Sonance (3) 634T, (3) RS1, and a OM200 subwoofer. Retails for about $2,400. If you need acoustic treatment for the inwalls allow $100 per speaker. Would still recommend cabinets for the in ceiling stuff since the insulation is probably very loose in the attic.

Leave money for quality interconnects. I'll assume equipment is going under the TV?

I heartily disagree with the "put the subwoofer anywhere in the room you want" mentality. This only works if you've got the crossover set insanely low (like below 45hz) and this will surely not be the case with in wall/ceiling speakers. You will be better served with the sub at the front of the room especially when music is played.

Maybe, but I have a funny feeling this isn't going to be an option for him.
After all, he already went to the trouble of recessing the TV and speakers,
He was pretty explicit about the look he wanted. I also believe he is aware by now that using in-walls/ceiling is already not a perfect situation. Life goes on. Besides, the room is only 15/20 and I didn't mean he could put it ANYWHERE, like in the kitchen!

Gentlemen, I am in awe at the time and effort you have put into helping me with my situation, all of your inputs have been a supreme help to me. You are all without doubt great human being to offer so much to an complete stranger. I can live with a stand alone sub. My ceiling is 9 foot high. The Definitives seem like a good choice, I think I'd lean towards 4 surrounds as opposed to three. Is there anyone here in the Riverside Ca area that could do the job. If so let me know and maybe we can get together and get this job done. Again thanks to all for such a great response.

I recently used Triad "inceiling" speakers for a home theatre where there wasn't an opportunity to use in wall or on wall speakers. These speakers have two 6" woofers and a silk dome tweeter each. They are in a fully sealed well made acoustically tuned enclosure, and they sound as good as an "in room" Triad speaker of similar makeup. The actuall drivers are angled down at a 45 degree angle projecting sound towards the listening area. I didn't exoerience any wierdness re: the centre channel dialogue coming from the ceiling. It was psychoacoustically fine. These speakers are very pricey though. But they are the only ceiling speaker I am aware of that provide this kind of performance. We also used two 10" powered subs left and right.