If a micro-sized 2 or 2.1-channel system is all that will fit into your lounge then you might want to take a look at Onkyo's new DR-815 micro CD/Universal DVD receiver.
A compact 2-channel receiver, hook up two speakers (or a pair of satellites and a subwoofer if you're feeling fancy) and you're ready to go.
The 32-bit DSP engine is capable of processing both stereo and multi-channel DVD-Audio and SACD discs as well as conventional Dolby Digital and DTS-encoded DVDs.
It will play conventional CDs and discs encoded with MP3, WMA, and JPEG files.
There is Dolby ProLogic II processing, allowing the receiver to derive convincing 5.1-channel audio from stereo soundtracks, and the option to extend to a full 5.1-configuration at a later date via the rear-panel pre-out connections.
Furthering those music credentials it's also iPod-compatible and has a 30 preset AM/FM tuner.
£275, available next week.