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james loudspeakers., Anthem electronics, go with better equipment , so I would suggest a 5.1 system rather than 7.1. Quality before quantity, bear in mind when listening to a home theater program , most of what you hear willcome via the center ( dialogue ) channel. Assuming you will use this as a music system also, the flanking fronts will be important to derive a satisfactory experience. Take your time - good luck!
I managed to get a 7.1 on closeout at a local dealer's garage sale several years ago. So i bought a Denon 4806 receiver, and Canton 300CD speakers (normally $1,00 each, got for $350 each x4 and Canton 360CD speakers (normally $750 each, for $200 each x 3) They are the cleanest, clearest speakers for multichannel i have heard.
With the Denon and a Furman wtih 'power factor the Denon/Canton combo is really good.
I especially love the clarity of the dialog with these. and the warmth in playing music.
As far as I'm concerned they are the speakers for the rest of my life in a multichannel setup.
Keep your two channel system until after you build this HT system.
When you play stereo media through this "affordable priced" system using in walls your not going to get the two channel imaging you may be getting now. Even with 7.1, aiming the tweeters has a great deal to do with the surround quality.
Don't get me wrong, I'm very satisfied with a receiver based HT but I have the luxury of retaining my two channel system. Subsequently, I'm not as critical of the 7.1 fidelity. Even so, the HT can be surprisingly good and music video is just too good.
I'll take the stance against 5.1 and for 7.1, its just two more speakers. All the up to date hardware will be 7.1. Small room size and the majority of 5.1 media are moot issues. I've had both and HDMI 7.1 with room correction kills.
Regretably, in wall speakers will never be optimal for two channel listening. Especially given your needs. Keep your towers, find a center channel speaker from the same company and put the surrounds in the walls. The front three speakers need to be matched as closely as possible, the surrounds aren't nearly as critical.
Do they have to be in-wall, or can they be on-wall? Anthony Gallo speakers are perfect for on-wall HT setups, and can still produce wonderful 2-channel sound. You can mix the Reference Strada and A'Diva in any combination to have a great system.
I bought an in-wall and in-ceiling setup from Mirage, but never ended up using them. I went in the other direction and got the OMD-28s. :-D I listed them, but I don't think many like in-wall, as you lose the 3-dimentional soundstage. If you are set on in-wall, email me and I will give you a great deal on these unused Mirage.