Need recommendation for a budget 2 channel setup

I need help adding better sound to my living room setup. Sources are a HD TiVo, a PS3 for blu-ray and MP4s, and music from an iPod or streamed via AirTunes. The space is an asymmetrical 600 sq ft modern loft with 11 ft ceilings.

I have a HK DPR 1001 with mid-level Polk 5.1 speakers sitting in my garage because my wife didn't like the speakers everywhere and the complexity of the A/V receiver. I also have some Athena AS-B1 bookshelf speakers in my garage.

Currently I use my Panasonic plasma's built-in speakers for TV/movies and a Klipsch iGroove HG for iPod/AirTunes.

I have a small budget and would like to stay under $500 but may be willing to spend a little more.

I have a mounted 50" flat screen over two of the entertainment shelves pictured below. I need to have the speakers sit on top of the shelves. Soundbars won't work as they are too long and the shelves are stacked with books.

I am looking for the best 2 channel sound I can afford and I don't need an upgrade path to 5.1 or better. A 2.1 speaker setup could work but the sub would have to be flat enough to fit under the shelves. My options seem to be:

1. A simple, slim integrated amplifier or receiver and use my Athenas. I'd like something under 3" tall that doesn't generate too much heat. I found the Rotel RA-04 online but I don't think they offer this in the US. This way I could also upgrade my speakers later on.

2. A high end ipod powered speaker/dock setup

3. Powered studio monitors

4. Also, if I add a sub it has to be slim enough to fit under the shelves.

Any suggestions? Thanks!

Thanks for the suggestions. I set up my HK receiver with my Athena's and solved the complexity issue by routing the sound through my TV. This way my wife can use the TV speakers without having to turn on the receiver if she wants.

My wife is ok with the setup but she hates the boxy speakes sitting on top of the shelf. The original pic was from a catalog. I took a pic of our actual place to help you visulalize (below). So now I have a couple of more questions.

1. I can put the Athenas on the floor on a small stand that tilts them up but doesn't add much height.

2. I can look at upgrading to a more modern looking bookshelf like the minipods and put them on the shelf.

3. I can look at some small/narrow floor standing speakers but I'm guessing the bass output won't be much better than bookshelf speakers.

Also, where might I find a freestanding spacer shelf so my TiVo can sit over my receiver. I'm looking for something simple - like a thin metal shelf that looks like a U bolt from the front.

And where can a get the cooling fan with an AC plug?

Thanks!