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?

I bought the exact same thing for my brother 2 years ago and it is very good.

That sounds like a pretty great gift, don't forget to throw in some speaker cable too and maybe some banana plugs to pretty it up. Maybe another HDMI cable as well to go from the AVR to the TV. It would be no fun for him to open it all up Christmas day and not be able to plug it all in.

Looks like 2 sets of HDMI and optical audio cables. 1 set from PS3 to AVR. 1 set from AVR to TV. And some speaker wire. As expensive as optical audio cable is, it would probably be better to spend a little more on the receiver that can send sound through the HDMI cables instead.

I just read the specs on the Sony STR-DH500, it will handle the sound and video from the ps3 no problem. It only decodes DTS and Dolby Digital, no DTS MA or Dolby True HD, but for the price of the receiver you can't expect much more. I don't see a need for optical cables in this setup... I could be mistaken though and if you do need optical calbles they can be inexpensive, along with the HDMI cables if you buy them from a place like monoprice.

As long as the receiver supports LPCM audio over HDMI you're good, I wouldn't pay extra for the HD codec support in the receiver, especially when paired with a PS3 which does a perfect job decoding on it's own. But I would not get a receiver in this day which had no HDMI audio support at all.

Like I said earlier, the Sony STR-DH500 has no audio capability in the HDMI cable.

Oops. It looks like I didn't say that earlier.

Check out Pioneer's VSX-519V-K. It has the same list price as the Sony, but does 5.1 PCM over HDMI. Found them selling for $180 from reputable sellers.

Yeah. It looks much better than the Sony. I just might return the Sony to newegg, then get 2 of these. One for my son and one for me.

Got RMA number from newegg. Will box back up and ship UPS ground back to them tomorrow. Just won't have any sound for up to 3 weeks.

Does a refurb Onkyo TX-SR307 for $159 do anything for you?