1) The reviews that I read on the internet were just ok. I also read on one website that PS210 has a very short life and msot people were complaining that they had to get it repaired/repalced in 1-2 years time. Is this true?
Either way, I have a feeling you can do a good bit better on the subwoofer front, regardless of how long it were to last.
Maybe get in touch with your nearest SVS distributor:
Dealer Information - SVS
2) Are these speakers too old?
Nope.
3) How is the Harman receiver?
As a harman product i'm sure it's well and fine, however I would recommend looking into a Marantz SR5006 as well as I suspect setup will be less of a hassle.
4) I can also upgrade to PS212 sub woofer, Does that make sense to do this?
Definitely, especially for home theater. For music alone you'd be better off just getting the P363 mains IMO.
5) Are there any good alrernates that I can consider instead of this system in the same budget?
For the time being, I recommend saving your money on the subwoofer and center, and upgrading to the P363 main speakers. They should have plenty of deep bass (until you add a true 12" vented sub) but more importantly they use a 4" midrange which helps them sound better than the P253s.