Some guidance please?

Guilty on all counts! I would caution you that there is quite a bit of folderol on this site, though it must be less than on some others. If you doubt this check the chat section and click on "disputes". Audiogon stopped airing these openly about a year ago, but you will get the idea. Many center around the misgrading of gear but there are a lot of diputes regarding shipping damage as well. Which brings me to my next point. After turntables, speakers are the most likely items IMHO to suffer shipping damage. Go into shipping speakers eyes wide open, and deal with someone who is very familiar with shipping speakers. Double boxing can be a not inexpensive, but valuble option that I ususally require.

That said, there are many good speakers out there. Modern computer analysis and modeling has become a valuble tool that has really helped modern designers to deliver an incredible product at very modest prices. The best advice is to get out and listen to find out what your taste is. That said, I like the speakers designed in Canada with the help of the NRC; any time a government wants to pay for loudspeaker research that works just fine for me. The Paradigm and PSB brands are just great. Easy for your Denon to drive with robust sound, they make a lot of nice models to choose from as well. They tend to be well regarded and plentiful on the used market. Check out their websites. The Denon is a marvelous receiver; I was just being crass, as ususal. Viva la cats.
Marty

As usual you're getting some good advice here. I second the Canadian speaker recommendation. PSB, Paradigm, Pinnacle (I don't know why they all start with P - it's a Canadian thing eh?) - all excellent values that you can drive easily with the receiver you have.
Now - Size - yes size matters, but in different ways than you might think (ask your girlfriend and push in her tweeters while you're at it) No you're not ever going to grow up - get over it already.
Large speakers usually mean better bass, while smaller, stand mounted speakers usually have better imaging. You already have a sub, so maybe smaller speakers (called monitors) could be your thing. They take up less floor space, are less obtrusive looking and often are better for music.
PSB used to have the Stratus Mini, which was superb - you could get two of those, a C6i center and some Alpha's for the rear and be way under $2k, and have a great sounding system to boot. Oh, and they're easier to ship. 100lbs of speaker costs a fair sum to ship.
Put some $ into decent cable, and you're ready to go.
have to agree about Polks - not a bad speaker but sinks about as fast as Big Pussy on the Sopranos price wise - as does Definitive Technology, which might be something to consider for a real theater speaker - flabby uncontrolled self powered built-in subs - dreadful for music, but fine for your next blow-em-up action film.

If you do decide to plunge into the used market for speakers, you might also want to consider trying to go for local pickup. It beats the heck out of shipping damage, you get to see them just before you hand over your cold hard cash (not that there have ever been grading disputes here ;~), and you know they didn't get thrown off the truck at the end of your driveway.

I've been very lucky in my limited experience - shipped speakers arrived just fine, and driving to pick up some other (and larger) pairs worked wonderfully, too (though I'm still paranoid about the shipping and figure it's just a matter of time until the luck runs out). And the best part about pickup? I've met a couple of the absolutely finest class acts you could ever imagine - worth the trip! (And I agree w/ those Paradigm, PSB, etc. comments, too - they can be a great combo w/ a 3805). Good luck!

Colyerdogoff,

I will second the recomendation of the B&W 600 Series which can be had in your price range new. They are larger monitors so you will need stands and don't forget deecent speaker wire. A friend has the Denon and the 600 series with very good results.

I just wanted to thank you all for your input. You have certainly pointed me in the direction I think I want to go. I went to the local high end audio store and auditioned a set of Paradigm Reference Monitors. I was impressed with the sound quality to price ratio. I felt the highs were a bit muffled though(my only complaint). It was certainly something I could live with. Then I went directly to the B&W room. After 30 seconds of pure sonic bliss, I was like Parawho? The Paradigms seemed like a well enough speaker, but the highs in the B&W's were so much more crystal clear to me. I've heard some say that B&W's aren't good for rock music. I think they'll work superbly for my applications.
I'm a big Offspring fan, so naturally I took one of their CD's with me. I was completely unprepared for the sound quality of these speakers. I politely excused myself and picked my jaw up off the floor! It sounded like Dexter Holland was belting out line after line right in front of me.
I may have gotten myself into a bit of trouble here. I think this might be comparable to a heroin addiction!
I've decided on the B&W DM603 S3's for the front, an LCR600 S3 center and the DM 601 S3's for surround. An SVS 20-39 PC+ will compliment the low end. I'll do a Denon 3805 for now to run everything. I'm not ready for pre amps and amps yet. Although I can see them in the distant horizon.
Again thanks a million everybody. If anybody has any of the above B&W equipment, I would be more than happy to take it off your hands.

Rich