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I'm no audiophile. Is Sonos really $199(at minimum) good? There soundbar is $700 I think. Just seems like really expensive equipment.

IMO, the results vary. The Play:1 is a glorious sounding speaker. The Play:3 is the exact opposite. I had a pair in stereo and they sounded terrible. The older the source music, the worse they seemed to be. My 60s and 70s era stuff sounded plain awful. Recent movie soundtracks were acceptable. I have no experience with the Play:5 (either version) outside of Magnolia displays.
I invested in the home theater setup. The Playbar has a very narrow soundstage - especially with music - though it has displayed some surprisingly wide effects during TV shows. The Sub has grown on me though I was initially not a fan, having given up a 12 inch Velodyne to go wireless. I have to say that the construction of the Play:1 , Playbar and the Sub is very nice, Apple level stuff actually. The Play:3 by comparison is borderline cheap.

I feel overall Sonos is acceptable, but nothing I would call "hifi". I'd really like to try the Denon HEOS at some point.
 
I was looking at Sonos speakers that embed into the walls of your home. The installation I'm looking at would be wired to a traditional receiver though so I'm assuming none of this would benefit me, anyone know?

You would need this: http://www.sonos.com/en-us/shop/connectamp

I have one in my house, wired up to in-ceiling speakers. It works great.

I wired the the house for distributed audio, with all the wires going to a central location. The nice thing about Sonos is I can buy one piece at a time. Some of the other options i was looking at were cheaper in the long run, but much more expensive upfront, like this setup from Home Theater Direct http://www.htd.com/Products/Lync
 
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