Are pot lights still the way to go for lighting a family room.

A lot depends on what lighting you are starting with, how big the room is, window sizes and placement and what activities will be taking place. My family/living room came with switched outlets and multiple styles of lamps does the job just fine.

New LED lighting is available that changes the game. I am finishing my master bath and adjoining walk-in closet. Closet was poorly lighted with a single fixture on one end. To top that off, there was no electrical box behind it and they had attached the fixture to the wall with common nails. I used four very thin recessed lamps made for motor homes. Tucked the LED power supply behind an access panel for the whirlpool tub pump. The lighting effect and difference is spectacular.

There are mains voltage LED lamps available if you already have wiring available. I like the idea of having low voltage wiring above the ceiling and fixtures were under $10 each.

As for the pot lights, they require more hardware but LED bulbs are available. The way to go is whatever you like. It's good to have more choices than ever before.

I think so. I like that they are unobtrusive and can really fit with any decor.

http://recessedlighting.com/recessed-lighting-layout/