You've got a HUGE (8250 csf) room to fill with sound and a budget HTIB system (or even a 1000 dollar one like the otherwise solid Onkyo 9100) might have trouble doing so without distortion. That Sony is WAY undersized for a room like that and in my opinion has no parts worth salvaging if you plan to use it in such a large space (give it to your kids, relatives or retire it in a home office or den or something).
My recommendation is to either save up some more money (I'm thinking this might require 2k ) or use that 1000 dollars to buy decent pair of tower speakers and a receiver now and just go stereo for the time being. You'll be surprised at the bass and oomph good towers can put out just on their own. Then add your center, rears and powered sub as you can afford to.
If you have a lot of hard surfaces and/or cathedral ceilings in that room keep in mind you will want to budget some money to room dampening or even the best system will sound boomy. Plush area rugs, carpet, heavy drapes, wall hangings and soft furniture will all go a long way towards helping a really active room. You don't really need to buy special items, just keep this in mind as you go about normally furnishing the room.
I bought a house with a large (17'x22'x22' family room) that came pre-wired with a 5.1 Sony DAVBC150 system (circa 2004)(650 Watt, digital, 5 cubes with 108W ea. (3.5"), and a 110W SW), whose sound is so distorted I can't understand TV or movie dialogue or song lyrics. Bought a new HDTV and good blu-ray player, so now budget is tight. Now wondering if any of the sound system is usable, if tweaked or suplemented, or if I have to scrap all and start over. Would a better receiver make the existing speakers sound a lot better or will they never be able to do the job in the big room? Would it do to simply replace the center speaker and the subwoofer or will a matched set be just as cost effective and do a better job? Am not a sound snob and just want decent sound, not perfection, for $500-1000, but recognize the problems the big room presents. Suggestions or advice?