For my birthday this year, we finally decided to finish off the soffits.
I replaced the homemade MDF speaker mounts with legit mounts, and the soffits were lined with OC 703 acoustic insulation.
After that, the insulation was covered with Guilford of Maine FR701 fire resistant and acoustically-transparent fabric.
Trim painted and installed:
With the lights poking through:
I honestly don't know if it made a large difference in acoustics - I didn't really do any back-to-back listening sessions nor did I take any measurements. I might run the auto-calibration on my receiver again to see what it picks up now.
It looks great now and we're really happy with it. To totally call it completed, we still need to install blackout curtains for daytime viewing, finish trimming and painting the equipment cabinet, and do some touchup paint on the walls - all of this construction isn't nice to the paint, and the ultra matte paints I used aren't forgiving of flaws.