I'm in a similar situation here in that I had all free standing speakers and on-wall surrounds. Recent circumstances have mandated that I need to go in-ceiling for at least my surrounds in my primary home theater. I have Revels in my main listening room, under full disclosure, and I didn't want to lose the spectacular envelopment of the Revel S30s. They are simply the best surround speaker I've ever heard.
I debated and finally went to Revel in-ceiling (IC15 to be precise) and have been blown away at the quality of the speaker. The tweeter and woofer are angled and there is both boundary compensation and tweeter compensation. The speakers are specifically optimized for an 80hz crossover and must be used with a sub. Perhaps most importantly, the Revel IC15 is fully enclosed with a back box; thus, you don't get tonal variation based on insulation, cavity density, insulation, sheet rock and other stuff that plays a role with open back in-walls or in-ceilings.
(BTW, Revel just announced a new architectural series that replaces the in-ceiling versions I've been looking at).
So, as far as the Revels go, I simply cannot give you a higher recommendation. They match with my free-standing fronts perfectly...and that was my biggest fear. Dynamics and Timbre are stunningly perfect. Now, I completely agree with Scott that you absolutely must get the same speakers from the same manufacturer. Some time ago, I tried using Focals with my Revels to complete a 7.1 setup and the timbre difference was off slightly, but it bothered me tremendously. You will forever regret going a cheap route...and Focals are *not* a cheap route!
For my secondary theater, I setup everything using Atlantic Technology in-walls and in-ceiling. No free-standing speakers at all. Again, what I loved there was the closed back. I even went in-wall sub and it's surprisingly excellent. My Atlantic Technology setup is using their "lower end" speakers which are still very good by any standard.
I have also listened to Triads, which Scott also mentioned. They too sounded excellent.
Finally, if you are really, really serious about the best-quality in-walls and in-ceilings, then I strongly suggest that you look to closed-back systems as those speakers with a back box have been voiced to the box. I personally also look to speakers that can be used and are advertised to be used as fronts. Thus, you get the best possible performance, dynamics, and enjoyment.
Certainly, going such a route is not cheap. Given your budget, I *think* that the Triads are out. The Revels are a possibility (look at the new line) and the Atlantic Technology you can probably go for in that price range.
Good luck and have fun!





