In my opinion I've never heard in-ceiling speakers that get the job done. Everyone (by everyone I mean like 3 people) I know that had in-ceiling speakers were disappointed with the surround effect.
Also, be sure and set a good chunk of money aside just for the subwoofer. If I'm reading your post right then it sounds like the 15x15 foot room opens up to other rooms. This means that your sub has A LOT of area it has to move air in even if you aren't that far from where it's placed.
Everyone will probably start recommending the speakers they bought more so then what exactly it is you need and for good reason; they are satisfied customers. Infact, I'll do the same right now. I have a polk rti4 bookshelf set-up that I couldn't be happier with considering you can find these speakers for ~$150 a pair. Just remember the key is what works for you because speakers are subjective at the end of the day. The caveat to that is you have to first try fine wine before judging what lesser wines should taste like if all you're used to is wells. I hope that made sense. Basically everyone will also tell you to audition speakers yourself, but make sure you also listen to really nice speakers so you know what to judge the speakers in your budget against.
There's also many people with similar budgets who made threads that might help you start narrowing things down.
Hope this helps you start on your search, good luck!
In the receiver, I don't think I'm looking for anything incredible. Currently I only have 2 devices using HDMI, of course I'd like a little room for future expansion, but I can only think of one more device that I would get which would require it.
Other than that, I just want to have something that can handle all the new audio codecs. I'm not concerned with video processing, my TV can handle that. Based on the general setup of my room, I don't think I'd ever really step up to 7.1 either.
Dark5 made good suggestions here. Go listen to speakers and see what you like. As far as your budget,if I was you I would use the AVR you have now(if you have one) and use all the budget on getting fronts and build from there. If you can squeeze in the center great.
Dark5 is correct in that you will need not to skimp on the sub. You might look at the ID subs for the best value.
If you have to buy a AVR,I would keep it in the $350 range.
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