Answer: any. Answer, JBL 360C
A system built from separate components is always better than a system pre- packaged.
Depends on the size of your room. Tiny speakers have tiny sound. Big speakers sound better.
You MUST have a sub woofer.
There are architectural speakers that can be installed in the walls or ceiling, which might fit in better with your decor. These speakers can be painted or wall papered to match the room, and many of them sound pretty darn good.
I have Orb Audio speakers and they sound excelent. They aren't that expensive but have quality that can match sound system of much higher price. I got a 5.1 set for $1000 (not including reciever) but their sound quality can match a system costing $2000.
There are a lot of speakers floating around, I can't say which company is the best, but definitely don't buy Bose.