This sounds exactly like my kitchen. I'm also ready to demolish the fluorescent lighting. I'll be interested to hear what suggestions you get for lighting.

I can offer my opinion on a few things.
-Slate for a back splash is fine. My neighbor did this with a granite counter top and it turned out fantastic. She had it installed all the way up the wall to the cabinets. Looks great!
-She also put in hanging lights over the island and this worked out well. It's a very updated look.

zfly9,

I am linking your photo to make it easier to get to. Maybe someone else can do even better and embed them for you.

Even though your kitchen is small and easy to see from the one angle, a layout of what you're planning, plus photos from different angles and further back for context might help with figuring out your lighting.

Here is a link that might be useful: Kitchen

Here they are!
{{gwi:1596345}}From Drop Box
{{gwi:1596346}}From Drop Box
{{gwi:1596347}}From Drop Box

I think 5" recessed lighting will look nice. Pendants might be a little too busy for the space, that is only my opinion.

I was thinking pendants might be a bad idea as well, just wanted to get some other opinions.

Where should I place the 5" recessed lighting? And how many? What kind is best?

Also, do I put undercabinet lighting under every cabinet? What kind?

My kitchen is slightly bigger I have 6x 6" lighting.
They are placed about 18" from the wall. Focus on placing above the counter and then one over the floor. This is where you have to carefully decide how many without going too many.

as to undercabinet I use fluorescent undercab but there are many other kinds, so whatever works for you. I like to get different length of them to get full coverage.

Here is a picture, one is to the left not in the picture

This dropped ceiling with either a "dome" light or large fluorescent fixture is a very common feature of many Florida kitchens and is a tough one to deal with.

You can fill it in, but it will be difficult to match the existing ceiling in color and texture, and may always look like a "patch."

Another option is to raise the old ceiling up. This is what we did, but it was a much bigger, and more expensive, job; and the question always is, "Where do you stop?" In our case the dropped ceiling carried down the entry hall all the way to the front door. It was costly, but when we were done it really made the kitchen look a lot bigger.

I have seen several creative re-do's. The light fixture is removed, the foot deep cavity is patched and painted, and a crown molding is put along the lower edge. Some up lighting is hidden behind the crown. This lights up the box and brightens the kitchen. It also gives the impression of a higher ceiling and makes the kitchen look bigger.

Another option to just put a ceiling fan in the center of the finished box, with or without the up lighting and crown. I've also seen this done with a decorative molding at the top instead of the bottom.

You will still need task lighting. In the lower ceiling place a number of recessed fixtures. I have used the Juno remodeling cans with good success. You can find them in 4", 5", and 6" sizes. For your kitchen I would recommend the 4" with the Wheat Haze Alzak trim. Put them about 3' apart around the perimeter as near to the edge of the counter top as you can get. I purchased ours on line from Laner Lighting: www.laner.com

Here is a link that might be useful: Juno

So if I fill it should I put recessed lighting in there?

I know poorowner said to put one in the middle, but should I with such a small kitchen?

I think what svwillow1 is saying is that when you remove the big flour. light fixture - how are you going to repair the ceiling ? Because you will probably have a big hole. Patching is an option, but since you have a smooth ceiling- that will be hard to hide. That should be your biggest & 1st consern.
After that you probbaly only need 4 can lights in the kitchen area- maybe 2 centered over the bar. You just don't have a lot of room for too many more. I'd do under cabinet lighting under each cabinet- at least the two next to the stove, probably the fluor. tube kind so you can get more lighting. I wouldn't do any pendants over bar either- it'd be too busy for such a small area.
Good Luck

So 6 total? Should I put one in the middle if I patch it up?

I know patching seems like it might not look that great, but it seems to be my only option right now right? I can't raise the ceiling because that's too costly and over the bar is where the venting for the A/C / Heat is.

Also, how much will having a guy come out and patch this thing up run me?

Or should I just keep it raised like that and make it look nice?

bump? sorry.

Hey, call up drywall workers for an estimate.
And I reviewed your pictures again, I think 4 will be enough but that is up to you. It depends on the space, cut some little circle with paper and stick it up there and see if it looks OK. Try 4 and then 5 to see if you can find out a good distribution pattern.

Ok I hear on above the sink, one above the stove, then maybe two over the fridge?

What about turning the space above into a tray ceiling that fits in the same space? That will give you height and open things up. No pendants - the space is too compact. Go with high quality recessed cans - maybe low volt.

Since I moved into this house, we've eliminated every incandescent light in the house and replaced everything with fluorescent and LED lighting. Incandescents are just too warm in color temperature for my tastes, plus I don't like the heat they generate and can do without their energy inefficiency.

Initially, I had installed T12 fluorescent strip light fixtures everywhere ("regular" fluorescent strip lights). Now, I switched to T5 strip lights, bounced into soffets, extruded aluminum lighting trays, all kinds of things, everywhere. I have two 35-Watt, 6-foot strips bounced into the high, open-beamed kitchen ceiling, and it creates a soft wash of indirect light that lights the whole space. It's a surprisingly bright, efficient light source.

T5s also have a much thinner profile (3/4" x 1.5") than an old-fashioned T12 fixture, and much brighter light. T5 bulbs also come in an array of color temperatures (e.g., 2,900K-6,500K), even colors (blue, green, red, etc.)! Google "T5 lighting," and you'll find a bunch. I ordered mine online from lightingxp.com. Not a lot of available customer support, but the their products are one of the few that come in a three-wire grounded version.

Anyway, they shipped as promised and I was happy that the housings themselves were a light gray and pure white, and not off-white. The actual fixtures are attractively designed and come with all necessary accesories. It ships with standard Edison plugs, but they also sell junction boxes made just for these lights for hard-wired installations.

For under-counter, LED strips are my preferred choice, but they tend to be a bit pricey.