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Probably the best way to do speakers in a 240 is to put the factory size in (4" Circle) the doors. I bought some decent Kenwood's ($60 pair) for mine at Crutchfield (www.crutchfield.com), and they sound great. Naturally, they don't have a lot of bass response, due to their small size, but they do fit behind the factory grills and look nice.
As for rear speakers, they are usually 4" Circle on the back deck or possibly 5 1/4" Circle. Many people cut away part of their back deck to put in 6"x9" Oval speakers, as I have done. These larger speakers have much stronger bass response and counter for the relatively weak bass response of the 4" Circle front speakers.
If you want to, you can always hack up your door panels and try to stuff some larger speakers in there, but this can cause many problems. First, potential uglyness. Second, they can cause vibrations in the car. Also, the reason that 4" Circle speakers fit well in doors is because they have a very low height as measured from the front of the speaker to the back of the magnet. This is necessary for proper window functioning, and larger speakers can get in the way.
I personally wouldn't recommend putting in a component system, as you have to find places to put the separate tweeters, as well as places to put the crossovers and do all the wiring. If you're really into bass, I would recommend getting as subwoofer for your trunk (just remember 240's have rather low trunk space close to the back seat, and to order or build your subwoofer enclosure accordingly).
Overall, if you're serious about a stereo system that looks and sounds good, save up some money and buy high quality speakers that are the right size for your car. I think you'll probably be happier in the long run.
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Thanks to everyone for the help, Doug C. 81 242 Brick Off Blocks, stock, M46; 86 240, 131k
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