I would see about expanding his $500 to a little over $600 and get M2 from outlet at $306 and a cheaper receiver from your choice Best buy or Future shop. Both have decent ones in the $250 range(JVC, Panasonic) and he could get a cheap DVD/CD player used or new. I have seen some in the $60 range new at Future shop, although I have no idea how good it is. I looked at minisystems and they seemd to be a waste of money when you could go this route and do so much more later.
I have a riend that bought the JVC and it sounds/powers his speakers really well. He now has the ability to use it for HT or with his computer. Just my 2c.