Room Acoustics

The room is small so the biggest problem will be room modes. Foam and the like will do nothing to tame them (only large bass traps for which you probably do not have the space will). The first thing you should do is measure the room with e.g. REW. Next, try to move the speakers around for the flattest frequency response. Finally, you will need to equalize the low frequency response (by e.g. downloading the REW eq curve into a miniDSP). Sadly, in such a relatively small room the room modes will be at quite high frequencies. Therefore, room eq will only work for a relatively small listening spot.
My personal preference for good sound in small rooms is not to have too much bass in the first place, by just using little monitors like the Harbeth P3ESR. If there is no deep bass there will be no room modes (and their upper harmonics). If you really want deeper bass in a small room, add two or preferably even four small subwoofers to a set of small monitors like the little Harbeths, and equalize them with e.g. a DSpeaker Antimode 8033. See here for some reading matter: http://www.acousticfrontiers.com/20101029using-multiple-subwoofers-to-improve-bass-the-welti-devanti...

I am surprised there is so little discussion of room acoustics here, compared to cables or electronics that have far less impact on the final sound (if any).
Anyway, here is a link to a nice old BBC manual on the subject: http://downloads.bbc.co.uk/rd/pubs/archive/pdffiles/architectural-acoustics/bbc_guideacousticpractic...

Indeed. When we had our house designed we made sure to reduce background noise. It is in a quiet area, but the Netherlands are so populated that there is always some outside noise. The construction of the house is largely brick and concrete. We specified special sound damping double glazing and muffled ventilation openings (and none on the road side of the house). Heating is per hot water system (we do not need airconditioning) and mostly as floor heating. We also specified quiet water pipes. We went out of our way to find quiet kitchen machines, installed water pipe dampers and recently replaced most of the machines by even quieter ones from the latest generation of low energy consumption models. All this does make a difference. A somewhat noisy living room has perhaps 40 dBA background noise. The quietest you can get is about 30 dBA. That difference in potential dynamic range is almost the same as the difference between 16/44 and 24/96. More realistically, if your maximum spl is about 90 dB, it is the difference between 50 dBA dynamic range and 60 dBA. Since both are well below the dynamic range of a symphony orchestra, trying to get the noise down as much as possible trumps just about any upgrade.