My son lives in a tiny 2 story house with his wife and 1yr old daughter. (Plus 2 cats and a blur that I think might be a small dog.) The living room consists of just a couch and a 40in plasma attached to a stand with a couple of shelves and a Sony PS3. That's about all that will fit in that room. They are using the sound coming from the TV.

I usually spend about $500 on them for Christmas, so I'm thinking about a pair of M3's and a cheap receiver like I bought a few weeks ago, the Sony STR-DH500, or similar. Right now, the 2 of them come to exactly $500. Not sure where the speakers would be placed yet, I need to take a better look at their room.

Does this sound like a good idea, or is there a better idea?