Rman, I'd also suggest that your first thought about M2s may have been the way to go for small speakers. If you haven't studied the
SoundStage review with NRC measurements of the M2 it may be of interest.
As to the impedance setting, as Sean mentioned, leave it at 8 ohms. Receivers don't output at different ohms, that's a characteristic of the speakers. The amplifier has to be able to supply a certain voltage and current(governed by Ohm's Law)at a given instant in time, and if it can do so it doesn't matter what the impedance of the speaker is. The lower setting just reduces the maximum voltage(and therefore current and power)that can be output, and therefore would help prevent overheating, but reduces maximum power output by as much as half. Overheating should be of little or no concern, and the setting should be kept at the 8 ohm default.
