Yes, you can use the existing 5 speakers, later on when you have more budget you can upgrade to higher range speakers. On the 663 you MUST set it as 6 ohm. Any speakers lower than 4 ohm will give the receiver a hard time, and may overheat.
For the sub, you'll need a separate amp, as most AV receivers only has pre-out (sending out the signal non-amplified). My advice is to get a new active subwoofer.
You'll always get to hear the 5.1 audio codecs, and with 663 even the HD lossless tracks, for this part, it's the receiver that's important. But to get the best sound, you'll need good speakers.
Not sure about 663, but my 1800 can upscale analogue sources (S-video/RCA, not digital sources like HDMI) to up to 1080p. But I can only see little improvements, because Astro quality sucks to begin with. Like people always say, rubbish in rubbish out.
I don't have any experience with the Pioneer receiver though.

I'm having the same question too, will the 663 be able to drive all center/front(L+R) and the Sur(L+R) of my left over speakers from pioneer HTZ252DVD which rated 100W4Ohms? I've been troubled for a week now and haven't really got the time to go outdoors and ask. what happened was that my player+blabla of the set got stolen leaving back those 5speakers and passive sub.