really small speakers less than 500

Mission made some nice speakers in that price range, especially the 750 (if you can find some). I haven't actually heard these, but the nOrh speakers make me curious (www.nOrh.com). I've read that they're great at higher volumes, but not that good for low volume listening.

It's difficult to get any smaller than the Gallo speakers. They're about the size of a softball.

I can wholeheartedly recommend the mission 780. It was named "What HiFI" magazines's speaker of the year, and actually delivers on that reputation. The imaging is amazing, with great detail, and a wide, deep soundstage. They are small, about the size of Paradigm Atoms, but have a choice of real wood veneers, which look awesome. I am convinced these can compete very favourably with the B&W CDM1, at a much lower price.

I own the JPW 310 ($250 pair) in my second system and they are quite nice.

Agree that Sound Dynamics RTS-3 is a great speaker, see current review of this speaker in Positive Feedback. Also Audio Advisor is a good company to do business with and will give you a 30 day tryout. I am driving these speakers with the Magnum Dynalab 208 or the Audion Sterling 12 watt tube amp. Don't know which is best yet. Highly recommended speaker.