Opinions before purchasing

Sorry, left out the pricing for the Polk speakers....pricing is per pair:

Polk Audio Reserve line (R200 $600, R500 $1,000, R600 $1,300, and R700 $1,700)

I'd like to chime in... :) 

How about a used Pass Labs X0.2 preamp.  I have one of these I bought new some 20 years ago.  This is a 3 box arrangement, and it has that lovely midrange bloom that tube lovers like, but this is not slow or overly romantic.  In fact, the transient response is fast, not Halcro fast, but satisfyingly good.  These can be found for about $3,000 dollars on U.S. Audio Mart and here on A-Gon.  VTL, as in used gear also sounds lovely.  In any case, happy hunting. 

I agree that at this budget and room dimensions, a sub may be superf.  In general however subs are useful for more than just loud explosions.  A sub will even benefit a solo flute, for example, by improving the sense of space around it.  And by relieving the lowest end duties from the main speakers they tend to sound better.  A lot of the music that I listen to has low end percussion used subtly.  One usually appreciates it during live performances because it always seems to be missing in two channel, but a good sub will musically reveal it.

Wharfedale Evo 4.2 now on sale for $999. Highly raved over the internet reviewers, reliable ones.  For a small room like yours, you probably do not need sub.  Room gain will help on low end extension.

On the topic of small rooms:

I owned an A/V operation and enjoyed offering "creative solutions." After one-too-many customers stating: "My room’s not big enough for Home Theater", we decided to take a little action.

I ordered a 30" x 30" British phone booth (replica) and installed a 7.1 system in it. The design goal was when someone stated the familiar: "My room’s not big enough for Home Theater", we’d be ready with: "Is it bigger than 30 by 30 inches?" We built a custom baffle in the ceiling, took the "guts" out of B&W mini monitors, raised the floor 4", and installed a pair of low-profile JLAudio subs in the floor. Amplification was outboard and we used a vintage pay phone as a keypad to control basic functions. A 26" Sharp monitor completed the system. It played VERY loud and, yes, the bass POUNDED!! We calculated that it was the equiviant of having 4 kilowatts of power and 150" screen in an "average sized" room. It was alot of fun. Especially the day when a couple of female college students crammed themselves in it together, and we had to "assist" getting them out.

I also think it’s worth mentioning that we were very involved in competition car audio. We won a national title -- back in the day when sound quality mattered. In the car environment we were producing (and, measuring) ruler-flat response down to 32hz, and 130db+ SPLs were routine in vehicles exiting our shop. I guess we didn’t know it couldn’t be done.