[tonyvdb]

But my fiancee hates the large speakers. So i want to get the Onkyo 6100 reciever and cant decide on speakers
...... to be honest just wanna prove that BOSE isnt the best as so many of my fiancees friends claim. BUDGET: about $1,200.00

Welcome to the Shack

The first comment is going to be a bit tough because in order to get decent sound out of a speaker you need something larger than a 5"x8" box. Speakers that are small like Bose simply can not reproduce clean sound at decent volume levels.
If your fiancee wont let you get something along the size of the 6100 system your going to have a tough time with this.

Your second comment about Bose is very correct for the money you can do far far better.
Does your $1200 budget include a receiver?

 

[tonyvdb]

Living room is about a 9ft by 9ft

Obviously you cant change this but its going to be really tough to make a system sound good with room dimensions like you have. a perfect square is going to cause alot of cancellation of frequencies and give you strange reflections. Others can explain this better than i can.
I highly recommend looking at SVS for your entire speaker package. They make some of the best subs around for the money and there speakers are getting great reviews.
another option for a speaker package is EMP or Yambeka.

 

[tonyvdb]

I personally have an Onkyo 805 and would highly recommend Onkyo. The newer audio formats being decodes in the receiver is a good idea, The issue is that Yes the PS3 does decode them but its usually better to let the receiver do it.
I would upgrade the receiver to the 706 rather than the 606 as it gets you THX modes that are very useful and also pre-outs for adding a future amp down the road.
HSU makes a good sub comparable to SVS so if thats the way you want to go thats ok.