Still pondering Paradigms

The selection of speakers to audition is limited in my area. However, with a budget of $1,600.00, I can't afford the majority of the really good higher-end speakers out there. There is a Paradigm dealer here, and I must say, that I was impressed with the Studio 40's. At least I think I was!!

My dilemma is that I need to replace my ML Sequel II's (wife says there too big) and I've been very happy with their sound. I don't want to give up too much of what the ML's offer - clear, transparent upper and mid-range frequency. At the same time, I would like to find something with some good tight lower end. All this must be accomplished with $1,600.00 and fit into a very small room (12 x 14).

I thought I actually heard some darn good low end coming from the Paradigm Studio 40's (surprising for a bookshelf). And, they were very quick and didn't appear to sound harsh in the uppers. Can this be?

Would this speaker actually be a reasonable replacement for the Sequel II's?? Keep in mind; I wouldn't be getting rid of the Sequels if my wife weren’t making me shrink my sound room (for a kids room).

Okay, here's the bottom line: Is Paradigm the real deal? Are the 40's as good as what I've been reading? Can I find something better for the money? Are there any happy and satisfied Paradigm Studio 40 owners out there? Any persons out there familiar with the ML Sequel II’s and the performance of the Paradigms??

Note: My buddy, who's a B&W dealer, (I can't afford the 704's) says the Paradigms pretty much suck in comparison to the ML Sequel II's (I bought the ML's from him). But, that's not what my ears are telling me.