bigjohn,
I have a cheapy Pioneer receiver in a spare room. The lowest crossover setting is 100hz. That was too high for the sub and speakers I have in there. I took the sub out.

The mains in that Onkyo HTIB aren't bad. Obviously they lack the detail of the Axioms, but they will play deeper than the M2s or M3s (albeit with some colorations and boxiness). I doubt your friends will complain about the bassy colorations.

Good sub, good receiver. It's a pleasantly warm sounding, LOUD, cheap system. I just don't see how you can go wrong with it for your budget conscious, non-audiophile friends.