I would definetely go with the M60 in-cabinet. You will still need 2 or 3 inches between the speaker fronts and the back of the screen. This means the screen itself should not be flush against the false wall, but you can build out around the edge of the screen area with some 2x2 or 2x4. Putting the screen against the front of the speakers will make the screen vibrate too much. (According to what I've heard everyone else say.)
Oh, and one more thing. Definetly use 3 M60's for L/C/R. This will give a better and more even sound field. A horrizontal center channel is a compromise design to allow for placement under/over the TV.
I too want to use a setup similar to this. Have you chosen which screen you are going to use? All of the AT screens I could find were very expensive. Especially the ones that claimed to not need any upper frequency boost.
Very good point and I think I may do exactly what you suggest. Looking at Seymour AV CenterStage XD fabric. I've read nothing but positive comments about the fabric. I've also read 2" minimum space between speaker and this screen fabric. I would go DIY route to save some cost as well.
