Bored with my B&W Zepplin Air

About a year ago I bought a B&W Zepplin Air for my study. Since it has a fairly large footprint, I couldn't place it on my desk next to my laptop. Although, at first I really liked the overall sound, I found myself not listening to the unit as much as I thought I would be.
Possible reasons: Lack of stereo imaging (I know not really Zepplin's fault as it is a single enclosure), bass is a bit on the bloated side (even with iTunes adjustment) for my taste and lastly, what I realized after a few months, listener fatigue. I can't really put my finger on one specific aspect but I just don't enjoy listening to music on the Zepplin.
Well, here I am looking for something more suitable for my study. The room is about 15 x 10, 10 foot celings, wood flooring, rectangular and has lots of furniture.
My music preferences lean more heavily toward jazz and jazz-style music (Diana Krall, Madeleine Peyroux, Melody Gardot, etc), blues and occassional rock and roll/pop (Nirvana, John Mayer, Jimi Hendrix).
I am mostly interested in near field listening - I work late nights sometimes and do not wish to disturb the family, so bass and loudness are not pre-requisites at all.

So here is, at least what I think, what I am looking for:
1. Small speakers that will easily fit on my desk (4 x 3)
2. While getting great sound is the ultimate goal, I wouldn't mind some aesthetics to go along
3. External DAC (not sure about this one)
4. Near field listening
5. Total budget between $700 - 1000 max.

For speakers, I want to stay small so I've been looking at multi-media speakers.
I listened to B&W MM-1, and while they sound quite good, I am not sure if they're worth $500. On the plus side, the speakers look beautiful and elegant. I've also heard they have a pretty decent DAC so maybe I won't need an external DAC if I get these?

I also listened to Audio Engine A5+. They can definitely go louder than MM-1 but to be honest they look hideous (at least to me) and 90 percent of the time I do my listening at low to moderate levels.

Never had a chance to listen to Focals but I've heard they're good. Also, I'm not sure I can accomodate a sub in my study.

Lastly, one speaker that caught my attention is Serene Audio's Talisman. They look stunning (well, at least to me they do) and I've read some good reviews on them. But I've not had the opportunity to listen to them. Also, I am not sure about a single-driver speaker.

So, in short here's what I'm struggling with:
1. Is multi-media speakers the best route when space is a major constraint? Please keep in mind that I want a minimalist setup in the study.
2. Are there any non-multi-media speakers that are as small as the AudioEngine A2 and provide decent sound with the addition of a not-so-expensive DAC/Amp. Just for reference, I think Emotiva's desktop speakers are too big for my purposes.
3. If I get good speakers with a decent built-in DAC (such as B&W MM-1) do I still need an external DAC? In other words, will the sound be noticeably better with the addition of an external DAC?
4. Should I go for active monitors (just hookup directly to my PC) or buy passive and add a small amp/DAC combo?

If anyone can suggest a synergetic configuration (speakers, DAC/amp) within my price range (700-1000), I'd really appreciate it.
Also, if anyone has direct experience with Serene Audio speakers I would love to hear from you as well.
Tired of listening to plastic radios? Shocking!! Dragonfly or Audioengine D3, Focal XS Book would be miles ahead of the current set-up.
I would not be concerned about single driver speakers. They can be most cohesive and likely error by rolling off frequency extremes, at least those meant for desktop use. Given your post, this should not be a problem, possibly a benefit. Find speakers based on your listening preferences. How about a new NAD 3020 with speakers of choice? Such a system could be put together within budget.
I really enjoy my audioengine A2 and A5+ speakers. I have NOT heard the Zepplin so I can't make a direct comparison.

I have been extrememly impressed with my A5+ speakers, especially when I have them connnected to my good SACD player rather than using the iPod (via 30-pin to RCA cable) which is the normal source. I would imagine that the audioengine DAC or other external DAC would yield similar results.

I think the new A2+ speakers have an onboard DAC which might be a great option.
Thanks for the valuable insights.

To be fair to the zepplin its not a bad speaker at all, just wrong application. I thought I needed room-filling sound but realized what I really needed was near-field listening and good imaging.
So yesterday, I went to BestBuy (for the fourth time) and auditioned the B&W MM-1, Audio Engine A2 and A5+, and Genelec one more time.
The A5 sounded pretty good but to be honest its just too bulky for my medium-sized desk. At that size, I can just get regular bookshelf speakers instead.
A2's were nice but they sounded a bit too forward for my taste. Same for Genelecs.
Of the four models I auditioned - and I have listened to them four times now -:), I thought the MM-1s have the most balanced sound. They are more laid back and the mid-range is smoother compared to the A2s. But boy are they pricey!
I think one of the Apple stores carry the Focals, so I would probably visit the store later today to check them out.
Those Talisman speakers look very, very cool. And I notice they have 5 different models with radically different shapes. If aesthetics are very important to you, these would seem to be the logical choice. And they have powered versions with amps built-in, very nice. It seems they do need a DAC to handle digital sources. And Serene offer a 30 day in-home trial, good for you.

Alternatively, the Emotiva AirMotiv speakers have been getting pretty good reviews from the audio press and owners. They do have a very nice folded ribbon tweeter similar to the Heil AMT a legendary tweeter. They are also self-powered but would require a DAC, which allows you to roll your own sound. Emotiva offer a 30 day in-home trial and a 5 year warranty.

My guess would be that the Emotiva speakers will play louder with more bass extension, but you said this wasn't a priority. I guess it comes down to your tastes as to which would be best for you...
Wow! I just found this while perusing the Marantz products here. It's called the "Consolette" and looks like a very cool product - very nice aesthetics, too. has a built-in iPod dock and USB connectivity. All in all, a pretty sweet piece at the $499 asking price:

Adam Audio A3X or Adam Audio F5 + Audio Engine entry level USB DAC D1 will do a very good job for you. For near field listening go, with A3 X.
If it were me, I would get the Pure i20 iPod dock ($85 on Amazon) and a good power supply for it like a This dock has a superb DAC in it, and low jitter digital feed. Its a giant-killer.

Then get a good integrated tube amp and drive the new KEF small speakers that won product of the year from Stereophile.

Steve N.
Empirical Audio
thanks for the advice everyone! i initially bought Audio Engine A5+ but had to return it for a couple of reasons ...

the speakers were too big for my small and already cluttered desk. maybe its just me but i found the sound to be a bit too much (bass heavy?) for my taste. i was looking for a more intimate setting which the audio engines did not provide.

best buy magnolia had the b&w mm-1 on clearance for $350. with my additional $50 worth of member points the price eventually came down to $300 so i picked them up

i must say that they are doing almost everything i expected of them ... they are the perfect size for my desk and look very nice and elegant. while the sound is not as big and room filling as the AE5, it is very detailed, refined and crisp. the bass, while not substantial, has a tight and punchy feel to it.

the speakers sounded pretty unremarkable for the first 30 hours or so but after that they really opened up ... so far I am very happy. they are doing everything i expected a small desktop speaker to do
also the imaging is quite good ... i am listening to born under a bad sign by albert king and i can clearly hear his voice coming from the dead center, drums on the right, saxaphone is slightly right of center, piano is far left ... pretty enjoyable experience so far