Yes the russound does use cat 5. It uses all 4 pairs for 12v, ir, status, signal left,and signal right. It is an awesome system and I can also highly recommend it. If youre going to be retroing all of your wiring you can also use an abus hub with the amplified keypads to cut down on your wiring and price of the system. The only bad side is that it only has 15 watts of per power per keypad but is sufficient enough for whole house audio and does deliver quite a good amount of volume. You can do a single or multi source hub depending on how many sources you plan on distributing. The cheapest and best way Ive found is to use a single source hub and then control the whole house audio with a zone 2 on your reciever, but you lose the capabilty of independantly controling each room.