Kilsho,
Although I do not claim to be an expert, I'll try to give my less than authoritative answers to your questions, based on my intuition and limited experience.
1) In terms of cancellation, I believe that's an issue if the subs aren't set up meticulously, and that it CAN happen.
2) I'll never say never, but I suspect that most very low priced subwoofers don't sound exceptional at any volume, although lower volumes would be expected to mitigate distortion.
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But there are other important things, besides lower distortion, that tend to correlate with increasing quality such as:
->How well will the unit integrate with your system?
The older Rels (and maybe the newer ones, I just don't know so I can't say, that's all) were designed to integrate seamlessly with any or almost any system. Audiogon member Quadophile has written an EXCELLENT review of the Rel Strata Mark III on Audiogon:
Rel Strata Mark III by Quadophile->Not just how loud, but how DEEP can it go?
The Rels are (mostly) designed for REALLY low frequencies, and the crossover is generally set QUITE low. Mine is a Rel Storm 3 set at 27 hertz. Quadophile has his Rel Strata 3 crossover set at 23 hertz. The idea with these is to overlap the rolloff curve of the mains, so that the upper rolloff curve of the sub be added to the lower rolloff curve of the mains, yielding an almost FLAT curve (when summed) down to below 20 hertz.
Lower priced units are generally not designed with such a t approach in mind. In fact, they tend to sound boomy, meaning that they're overlapping the low end output of the main speakers. The cheapest of the cheap don't even control cabinet resonance very well. People unfamiliar with what good bass is SUPPOSED to sound like (I'm not talking about you here, by the way) think that's great, but they're really hearing augmentation of stuff that's probably more like up in the 50 to 80+ hertz range.
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3) The topic of satellites or monitors (or, sometimes even so-called full range speakers) for the main speakers paired with one or more subs has also been discussed, with the comparison being between dedicated, full range mains. Folks differ on their opinions about this, and a very good thread about that is this one:
Sub/sat versus dedicated mains