Lee, my suggestion for a small living room would be M22 mains with a vertical M2 center. The rest looks okay to me. You certainly will get significantly better sound, even using your old receiver. The recordings, speakers and listening room are the primary determinants of sound quality, not the receiver, assuming that it's operating properly. More power, and especially, more up to date features in a receiver are nice to have. I'd suggest that you consider the Pioneer 53TX and the Yamaha 1400, the major factor being that both of them have an automatic speaker and room equalization system built in, which is a significant advance and apparently the coming thing.
