I've been reading a lot about ceiling speakers as well, lush, but I wasn't too sure about them either. It seems like an unnatural direction for sound to travel, as Wayne pointed out. I wonder why they seem to be so popular. Maybe it all just boils down to aesthetics.
It could just be aesthetics. It could also be an attempt to take up less space (which might qualify as aesthetics, I'm not sure).
Is there any time that in-ceiling speakers would be the best choice, maybe in a certain layout or something? or is it just a bad call no matter what?