I put one in recentl that I am extremely happy with, I used the following:
Ipod, small amp, 2 nice 6.5-inch Ø Speakers.
Installed amp in stowage box in front of driver and one speaker there and the other in the rod locker. Both face each other in the walking area before the front casting deck and sound great. I do not have the deck extension. Yes, I cut 2, 6-inch Ø holes. You can buy a wire that plugs into the Ipod and converts the signal to 2 RCA cables which plug into the amp. It also allows you to play anything with a phone jack output like portable CD players and radios if you like.

I will be taking out the CD/radio player from a different boat I have to set it up this way as well.

As a quick great sounding alternative I just bought this Ipod Player at Sam's made by Altec Lansing for $99.00. This thing is sweet, remote controlled and has incredible sound like a nice Bose player would. You could just tote that thing around. It's shaped like a tube about 7-inches in diameter and about 18 inches long. More than enough for boat tunes. No radio in it though, but man it sounds great. I would have expected to pay $300.00 for that kind of quality. I did shop around and listen to what Best Buy and Circuit City had before I stumbled onto it.