That's not a bad system at all, but I probably would have opted to spend $50 more and moved from a Sony stereo receiver to a Sony 6.1 receiver, just to be HT ready (as the Stereopile review of the Primus 360 speakers eludes to). I owned a modded SB3 for a while, very nice. Down the road you could add a Altman Attraction DAC and have an absolute world beating source. College system selection is tough as you have to deal with abuse and theft. I solved the problem by hiding most of the gear in an ancient TV cabinet, going with obscure brands, buying small (high quality) two-way speakers that I added a sub to after college, and using headphones much of the time.
For a $1200 system the DIY does come more into focus. Over the years I've run bare ended CAT5 (Category 5 communications) speaker cabling, which enjoyed a bit of a rage a couple of years ago. It comes as 4 twisted pairs of 24 gauge copper wiring, either single strand or multiple strands, and various sheathes. (BTW CAT6 is supposed to be even better.) The best I've heard was plenum rated (teflon sheath), single strand that had been cryogenically treated. I paid $20 for 20 feet of it, the regular stuff can be found at Radio Shack for pennies per foot.
Again, you could hear the difference in $$$ cables in almost any system, but IMO it would be a silly place to invest for an entry level system. Can't name them, but there are sites that sell/swap a variety of used cabling.