Currently, my 12'x8' office is comprised of an L-shaped desk and a 5-foot wide, 5-foot high book case. If I dismantle my desk into two equal smaller desks and place the book case in the closet I have determined it would be possible to fit a smaller couch (loveseat) and install a wall-mounted TV. I would be using either a futon or a pull-out bed couch to make the room even more useful by adding another sleeping area.
I am wondering what would be better for the audio; install 5 in-wall speakers and a separate floor-standing sub or buy a simple 5.1 speaker set and mount the speakers on the wall.
Space is a concern obviously so I am leaning towards the in-wall speakers but eventually if we sell the house or convert this office into a real bedroom I will have to patch the walls. Wall-mounted speakers would be easier to "clean up" if the room is converted but would take up more space and look a lot less clean.
For in-walls, I am looking at 4 of monoprice's 5 1/4" speakers and their 5 1/4" center channel. I'd buy a budget 8" or 10" sub as well.
Also, I would need a receiver but cost is a concern and so is space so I am wondering if there is a decent slim-line digital receiver with decent inputs and HDMI out that doesn't cost a fortune. I will be connecting an Xbox 360 (component+optical or HDMI), PC (HDMI) and a HD cable box (component+optical or HDMI).