Shrinking my system

KEF LS50's, plus a pair of small, fast powered subs to fill out the 35-60Hz bottom.

Or the B&W PM1 monitors supplemented by their PV1D subwoofer. I've heard this combination and it is a winner in sound quality, conveying the sense of music, while being compact yet elegant in appearance.

check out devore speakers. Made in Brooklyn. Some are designed with small living spaces in mind.

Fritz Carrera 5" (you won't need a sub)

Maybe Ref 2A driven by a VAC integrated?

Check out the Sonist Recital 2's. Not well know yet, but
they will be. The high efficiency and the superb sound will
astound you. You may not even need a sub with this speaker.
Here's a link: http://sonistaudio.com/index.php?
main_page=product_info&cPath=13&products_id=49
Excellent sound/dollar. This speaker was the talk of the
Newport T.H.E. show last week. Check Steve Hoffman's
comments if you need someone with world wide respect. Here's
Steve's link with
comments:http://forums.stevehoffman.tv/threads/voxativ-
sonist-audio-speakers-i-heard-at-t-h-e-show-are-designed-
for-very-low-watt-amplifiers.358666/