I am just bulding out my basement and decided against my wifes wishes to have a theatre.  She wants everything flush in the walls, but I really want to experience great sound.  I have considered buying 2 RC 70 speakers and a RC-LCR for the centre and creating some millwork in the wall around the system to enclose it.  Are any In wall comparable to the RC-70? I still would need some in ceiling speakers to round out the surround, because I have an open space in the back.  My room is 14' wide by 12' long.

Here is a list of equipment that I have bought:

Onkyo TXSR705 Receiver
Velodyne DSP 12B Subwoofer
Klipsch SCR-2 In Ceiling ( Will this work with the RC 70 or should I buy someting else? I am concerned about timbre. I can still return these. Only spent 300.00 for 4)

 
I would appreciate any help.  Thanks.
 

From my experience in/wall speakers don't sound so good. Triad's in/wall are the best sounding in walls I have ever heard. 

1)  Putting speakers "flush" up with the walls will sound like crap no matter how you dress it up.  Period.  Don't do it.  Good floorstanders like the RC-70s need at least 2 feet of clearance; I'd give 'em 3.

2) Enclosing a speaker will create cave-like echoes.  You can put port-plugs in and lose the bass, but echoing will still be an issue and your first-reflections will be horrid.  Again, to keep a wife happy is one reason; to have a system sound good is something completely different.

3) In-ceiling speakers are pretty much without use.  In a patio deck or something where there aren't other options and good sound isn't an issue, you use them, but in a theatre-room it's a sin.  Sound should come at you from it's proper location at ear-level.  When it comes down from the ceiling, there's simply no soundstage and your brain gets confused.

I guess what I'm saying is: get a divorce.
 

Thanks.  I will let her know.