Are you going to have a center channel? I couldn't tell from the post.
I have M60s like Cheseroo. I absolutely love them, but do recommend being able to sit at least 8' away from them. We sit about 10' away, and 10-12' seems optimal, since if you are normally 10', the reality is you are often 6-8' away, you or a guest or child. 8' works fine for me, with the M60s themselves spaced about 7.5' away from each other on either side of the TV - it's great.
The advantage of the M60s is they are wonderful on music without any sub. But unless you anticipate spending over $700 and being 8' or more back, pass.
If you want/need a center, which is of course highly recommended for HT viewing with your AV receiver, then an economical setup would be three M3s ($413 USD, with one as a center) using some of your old speakers as surrounds ($0) OR three M2s (about $380 USD) in the same configuration.
Another reasonably priced option: 2 M22s as mains ($400), an M2 as a center (about $130), your old speakers as surrounds, and then pop for a sub. The advantage here is that in the M22 you would be buying one of the most highly regarded bookshelves under $800 to use as your mains. This is the route I would go, though I have never heard the M50 and for all I know it is the second coming. I just personally do not like floorstanders unless they are over 36" because I hate to be below the tweeter axis, and in a smaller room that's an even stronger consideration.
As far as a sub goes, my personal bias is not to use them for music, especially on a budget set-up, which is another reason to try M22s or M3s as your mains. An advantage to this approach is that instead of spending money TRYING to get a budget-"musical" sub, you can be straightforward and get a budget-HT sub, which widens your options and lowers your price range considerably. Any number of about $200 subs highly regarded at audioreview.com and other sites will fit the HT bill in your room, and (again my bias) your music listening sessions will be better without a sub, at least in the set-up you're heading towards.
If you want to get a sub that can work for music (and many on this forum would support this pursuit), my sense is they start around $400, with the Hsu STF-2 (I own one of these but for HT) being highly touted. This takes you over budget however -- and again, MY BIAS, but I'd spend your limited budget on (in order) 1. great mains, 2. matching center channel or a main that timbre matches as a center like the M2 (with M22) or M3 (with M3s as mains), 3. HT-oriented sub for your movies choosing from reasonably priced well reviewed for HT subs, like the Velodyne you anticipate or even an Infinity, Yamaha, or Sony available at BestBuy. If you resolve the sub-for-HT thing inexpensively enough, you may even have money left over for matching surrounds, like M2s or another set of M3s, but this should be the final consideration on your budget.
Birdman
