I am looking to spend less than $1300 on a complete audio system that will be used for both music and home theater. I want to start with a 2.1 setup because the living room in my apartment wouldn't really work with surround sound (there's no where to run the wires easily). However, I want to have the option to expand to 5.1 or 7.1 in the future. I would prefer to have HDMI inputs and outputs on the receiver for convenient integration with my HDTV.

My primary interest is making this sound excellent with music, but good movie sound quality is also important. I listen to a wide variety of music from metal to orchestral to jazz. Most of my listening would center around rock music varying from Pink Floyd to Tool.

Here is what I am looking at now. I am hoping you can tell me what the weak points are in this setup and if I can can get any better components on my budget. I currently am looking at:

Paradigm Monitor 7's (v5) for around $600
Paradigm PDR-10 Sub for around $300
Yamaha RX-V661 Receiver for around $500

The stereo store I would buy all this from would give me a percentage off the top, bringing the total to around $1300. Is that a smart setup for a $1300 budget? Any suggestions? Thanks in advance.