speakers for 5.1 and Onkyo question

I am almost there, but I have the following questions and if you gurus can please help me out:
1) I am about to purchase an Onkyo and I am thinking only to setup a 5.1 system, and I have currently the athana WS100 with Kliepsch RX4 speakers, so here is the question: Should I get a new speaker set or can I use my existing speakers which are decent and only get the missing pieces?
2) If I play my stereo Cds will it play OK with a 5.1 system? (I know this sounds like a dumb question, but does the stereo signal get converted to a 5.1 audio signal or does the Receiver automatically reconfigure the 5.1 to a steroe system?)
3) For you Onkyo experts, what is the real advantage of getting a 707 vs a 607 system? Is there a difference in the quality of audio and video or is it just more features like more inputs and etc?
4) one final question, I have two different satellite feeds with coax that I need to connect, and I noticed there is only 1 coax input. What is the best way to connect the second coax feed?
Thank you all for your feedback

1. It is usually best to have a matching set of 5.1 speakers, but I think they will work quite well together. Perhaps you can add some Athena rears to compliment the WS100's down the road. Do you have a sub?

2. You can choose either to play 2.1 channel stereo (2 fronts and sub) or all channel stereo (all 5 speakers) with a simple touch of the Onkyo remote. The Stereo "Play Mode" button is it I think.

3. As far as I know the 707 has 1 more HDMI input, 10 wpc more, is THX Ultra2 certified, a few more input options front and back and UC up to 1080p vs 1080i of the 607.

4. By coax for your sat, what do you mean exactly?? Are you talking about digital coax for audio or coax like RG6?

I have been really impressed by the 7.1 Onkyo speaker system in my signature and it can still be had for $299 on several sites.

I'd like to add something about one of your questions. You asked about playing music on it, and I wasn't sure how picky you are. I had an Onkyo 606, and found it not great for music playing, but it was adequate. If you are a HUGE music guy, you may want to consider a few things. You can get a good sound out of an AVR, but you will get a better sound with a dedicated music setup with a preamp, amp, and speakers. The AVR does a lot of things that take away from the sound. If you are a casual listener, it'll sound fine I'm sure...just thought I'd throw that out there.

Pycroft