Welcome Terp. I also agree that the M2s are your best bet for the rears. Consider a search on the forum as Alan has discussed the placement of the rears in some detail. Along with John, I'd also offer the opinion that sub is best in a corner. However, based on the alcove-like configuration you have where the sub will be placed, you may want to experiment with another corner as well. I'd also urge you to acquire an Avia disk anda Radio Shack SPL meter for calibration. Those tools will become your very good friends based on the room configuration and maximize your audio experience.
ray
