I wanted to thank everyone for their input into this thread, and also post an update on my search for (entry-level) 2-channel nirvana.
I ended up purchasing the Paradigm Studio 40s (v.4) as the final piece of my stereo setup. I was impressed with the synergy between Rotel and Paradigm, and felt I didn't make any "voluntary" compromises to meet my budget. Here's a quick overview of what I purchased to hit (barely) the $2000 budget, after a lot of haggling and purchasing some of these through used outlets:
Paradigm Studio 40 v.4
Rotel RCD-1072 redbook/HDCD player
Rotel RX-1050 2-channel receiver w/tuner
AudioQuest Diamondback interconnects
Nordost Heaven speaker cable
Paradigm S-22 speaker stands
I spent 3 full weekends demoing a slew of different speakers, both at home and at local pro audio shops. Ultimately, I demoed B&W 604/704 floorstanders, B&W 603/685 bookshelf monitors, Paradigm Studio 20/40/60s, the Ascend Acoustics Sierra-1s, Boston Acoustics VR2s, and a few other speakers that didn't set enough of an impression on me to bother remembering their makes or models. I didn't have demo access to many of the other noteworthy speakers mentioned here (Spicas, Von Schweikerts, Revels), but could not commit to buying anything on a blind buy. I guess that's my loss.
I'm by no means an audiophile yet, but I do consider myself an enthusiast who has finally stepped into the first stage of hi-fi audio. There are many misconceptions I had, as well as a few realizations that could only be made on first-hand trial.
For one, and probably the most important lesson for me, is that there is no direct correlation between PRICE and SYNERGY, and synergy trumps all else.
Taking really expensive pre-amps (like Krell or McIntosh) and pairing them with the speakers I demoed did not necessarily sound better, and in some cases sounded worse, than the Rotel gear I ended up with. I tried this out just to see if the Rotel receiver was a weak link in my system, but for the components I matched it with, it was certainly not. Even after trying most cost-effective 2-channel receivers like the Panasonic SA-XR55 or Harman/Kardon 3480, speaker performance fluctuated but didn't hit the "sweet spot" until I paired Rotel with "comparable-class" speakers like Paradigm and B&W. I'm not saying that McIntosh equipment sounds as good or worse than Rotel (as opposed to far, far better), nor that more entry-level Panasonic or H/K equipment pale in comparison, but Rotel+Paradigm and Rotel+B&W created an ideal synergy that clearly utilized the potential of what the speakers could do. This helped greatly simplify the rest of my research.
Second, audio cables and interconnects did affect the quality of sound for me - not to the point of making my system sound "better" or "worse", but certainly refining or polishing certain signatures in the listening experience that became more apparent as my ears learned to pick them up. In other words, I am definitely a believer that audio cables and interconnects affect aspects of the signal reaching the speaker but the changes were more refinements to imperfections rather than breathing any new life or personality into the equipment I was using. I tried using lamp cord, generic 18 gauge speaker wire at Home Depot, Transparent MusicLink MM (w/ networks), AudioQuest (King Cobras, Diamondbacks, a couple of others), and Nordost Heavens. I would easily say that the Transparent, AudioQuest, and Nordost interconnects/cables made marginal changes to the interpretation of music, but that lamp cord or Home Depot generic wires would have (and did) allow me to already decide which speaker I wanted. That's about the best I can do to sum that up.
I have to give a shout-out to Ascend Acoustics and their really outstanding Sierra-1 speakers. I did a 30-day at-home trial with their piano black bookshelf speaker ($850) and I'd say easily that they were the best performance per price speaker option that I tested. For every genre I demoed except for classical music, the Ascend Acoustics matched or passed every other speaker. I would definitely recommend the Sierra-1 be on the short list of any entry-level audio enthusiast "must demo" list. Using Norah Jones and Diana Krall redbook CDs, it was clear Sierra-1 packs a comparable performance to Paradigm Studio 40/60 and B&W 704 speakers (which just happen to be twice as much if not more by MSRP standards). There were ultimately two limitations with the Sierra-1s that bothered me -- 1) the speakers are not as efficient as the Paradigm Studio line, which made listening to classical music at "comfortable listening levels" a bit difficult for me, and 2) there just wasn't enough balanced sound staging to accurately reproduce some of the really complex classical music tracks I tried. The Sierra-1's interpretation of Rachmaninoff's Piano Concerto 3 (aka "Rach3"), one of the most difficult pieces to perform and one of my all-time favorite demo tracks, was not my favorite. The Sierra-1s performed extremely well when it pin-pointed on particular instruments at a time - clarinets sounded like clarinets, and brass instruments sounded remarkably well, but when the entire orchestra came together, it was as though each instrument had lost some of its own punch, and the overall whole sounded masked to the sum of the parts. Bass extension was a bit over-exaggerated and "punchy" like it was trying too hard to show that it was still able to go that low. Similar things were noticed with various Beethoven pieces we tried. If classical music were not a major listening genre for me, I would have bought the Sierra-1s in a heart-beat. Obviously, this is just my own opinion, but I wanted to comment at length about the Sierra-1s because my wife and I both really enjoyed them and wished they would have been the final choice.
The B&W 602 S3 monitor bookshelves, to put it short, were a disappointment - the speakers just didn't provide the kind of classical performance we were hoping for, and the bass was simply too overwhelming. I could imagine these speakers serving pop/rap/metal lovers where there's a lot of low-end information, but they were too fatiguing for classical music and that was one of the rare moments in life where I wanted to stop listening to Coltrane. The B&W 685s were actually even worse - I think the smaller cabinets and lighter construction hurt the signature and just seemed like a step backward to the 602s.
The B&W 604 floorstanders were a considerable step up to B&W bookshelf monitor line when it came to classical and jazz, but we heard some clipping in the middle of the tracks. Maybe it was a bad pair of speakers, because in the A/B comparison to the B&W 700 series, there was no such clipping or distortion. The 704s did, however, offer significant improvement in clarity, soundstaging, and tolerance of high-frequency instruments. My first reaction was that clarinets and percussion instruments didn't sound "natural" in the B&W line until I hit the 700 series. Based on what my local dealer was offering me, the 704s were twice as expensive as the 604s, and in the case, I felt the performance of the 704s was twice as good and certainly worth paying for. Yes, the floorstanders were far more expensive than the favored Ascend Acoustics Sierra-1s, as well as in a completely different class of speaker, but after listening to the B&Ws I would have expanded my budget instead of forcing myself to take the Sierra-1s now.
I was surprised how well Paradigm paired with Rotel, already knowing that Rotel and B&W tend to be the common synergistic blend of choice given they are both distributed under the same British label. Paradigm Studio 40s (bookshelf monitors) and Studio 60s (floorstanders) were both very impressive in all aspects - soundstaging, balance, accuracy with classical instruments, bass extension. I loved both of them equally and it really came down to a matter of preference between the two. The Studio 40s performed better with vocals (particularly with Norah Jones and Diana Krall), whereas the Studio 60s offered a less punchy vocal performance but a slightly better balance in overall classical music reproduction. I would say the Studio 60s sounded as good or better than the B&W 704s.
There were far more listening notes that I had made, but then again I've already turned this one post into a dissertation, so I thought I'd spare the details. I'm not even sure the comments I've made in here make sense, but the bottom line is I've picked my own winner after 3 long weekends and am entirely pleased with my 2-channel setup. I would strongly argue against the individual who posted earlier that an acceptable 2-channel setup cannot be achieved for under $3,000. It clearly can be done at $2,000 if not $1,500, and I think I've built a system that 1) sounds pretty darn good to me; 2) would impress a lot of others; 3) doesn't have any obvious weak links (to me); and 4) has at least a good 3-5 years of service for me, I hope.
Sure, I do have regrets that I couldn't get separates into this system, but that will be for next time. For now though, I've reached (entry-level) audio nirvana and wanted to thank many of you folks on AVSForum for helping me get there.
Thanks for the "contribution"...
) and see what can be had with the remaining budget. I picked up a Pio Elite 55txi/45a combo for about $400 and also snagged a Denon 3803/2200 combo for just over $400. That leaves some cheese for cables and maybe a nice bottle of Cabernet...
