My thought was to do away with his small center channel speaker and replace the AV receiver with an Integrated Amp.
This is exactly what I do... you just need to make sure the audio is down-mixed to stereo as someone else suggested. The process mixes centre channel into the left and right speaker signals equally and with no attenuation. You do lose the low frequency effects channel though so if that's important to him he'll have to stick with multi channel.
I put the HDMI through a switch that also provides an optical two channel PCM output so I can use a decent DAC for the analogue conversion. I wouldn't advise using the analogue outputs on any if the switches I've come across though.