Is there a stereo receiver good sound compact size

Linn Classik. All you need is speakers (receiver and CD player built in). Dimensions about 12.5"W x 13"D x 3.25"H.
Sounds great.

NAD makes a CD/DVD Receiver. Various models over the years. This is the current model (L53).

[url]http://www.nadelectronics.com/dvd_players/L53_shortform.htm[/url]

The old NAD CD Receiver was the L40. Might be used ones around.

Integra Research (Onkyo) makes a 5.1 channel compact DVD receiver. Model DSR-7.3

the linn...also the outlaw(receiver only)....lots of good vintage ones

I'll second the parasound line.

Others you may want to consider:

The Arcam Solo or the Cyrus Audio line of separates might fit your specs. If you can make enough room the Magnum Dynalab MD208 would also be nice but again not compact. The NuForce line (while not a receiver) is small enough to consider, just add a good CD player and/or tuner.

Any of the systems listed in this thread will be a worthy upgrade to your current equipment. Just be sure to audition your selection with the speakers you are considering/using (since you did not mention those).