Get good speakers first!
Hey
First off, I love Yamaha receivers! But for what it's worth (especially if you live in a condo) ... I'd skip the cheap sub and put that money towards better speakers
If you like Polk Audio, stick with them. But either get better bookshelf speakers (the ones with a 6.5 inch driver ... such as the Polk rtia3), or a center speaker (such as the Polk CSI A6), or (better yet) get towers for the front (such as Polk rtia9). I would piece together matching quality speakers, as you can afford them, until you've got the full surround sound system. Then, if you still want more bass, think about a subwoofer ... and get a good one!
I was in a similar situation about 10 years ago. I lived in a condo at the time. So I bought a Yamaha HTR5590 along with Athena AS-B2 bookshelf speakers. I eventually added the Athena AS-C1 (center) and AS-F2 (towers). I now live in a house but have yet to buy a subwoofer ... it's still on my with list, but I find the bass from my setup is adequate so I haven't been in a rush to add it.
RC