First of all, let me say that there is no perfect speaker out there...and likely will never be! All speakers have trade-offs and imperfections. I do think, in the right room, with the right gear and set up, you could make the Merlins sound about as good as you could ask for, within reason...ULTIMATELY, VERY SATISFYING!
From a neutrality and lack of coloration standpoint, as well as having top notch extension and detail, I think you couldn't ask for much more than what the VSM's offer. They will do best in situations where you sit proportionately closer to the speakers than to room boundaries(within reason), and or would greatly be helped in imaging by having acoustically diffuse ceilings and such. Being a "tweeter on top" w/one midrange/bass driver, it's more open to coloration, and thus less pinpoint/solid imaging without proper care and consideration. While more focused-array design speakers have an advantage in dyanamic focus, reinforcement of frequencies, less coloration from room reflections, etc, it becomes a trade-off often, depending on room set up and acoustical conditions.
That all said, for playing a large varriety of music that an audiophile is likely to listen to most often, I think a lot of what has been seen around the audio communities acceptance of the VSM's speaks for itself!...LOT'S OF PEOPLE REALLY LOVE THEM!
I do find a speaker like the VSM to have limited output, weight, and ultimate "authority" due to the laws of physics for that speaker. It has modest sensitivity, it's only a 2 way with small drivers, and is a "passive design", etc. So, for rock and heavy dyamic stuff played full range, one should only expect so much with these.
Still, if you need to play somethign like Rock and Roll or HT, and other dynamics stuff, you should be playing a speaker like the VSM's with the assistance of a subwoofer!(preferably crossed over higher with some sort of bass mangagement or pre/pro crossover!!!!). Inacting the assistance of an active powered subwoofer(or more), like with must about ANY PASSIVE speaker design, is going to yield tremendous dynamic advantages. Even more care and experience is often needed to get the proper balance and excellent bass results this way. But it's the way to go to do it right in my oppinion and experience. If people doubt this, just try playing some heavy paced Metalica, AC/DC, or most any other heavy dyamic stuff(including DD/DTS movies) through their main speakers full range, and tell me if you're impressed by the dynamics!...most audiophile speaker systems WILL NOT BE UP TO THE TASK "AS IS" THE WAY THEIR SYSTEM ARE RIGHT NOW!!
Again, all speaker systems have their trade-off's, and the VSM's are no exception. Bigger Martin Logans, Large ported/driver speaker designs of higher sensitivity, horn speakers, active woofer designs and similar, all may have better dynamic capabilities on a large scale than the more reserved VSM Merlin's. But you could make up for this, if you need it, by reconfiguring and engineering the system! I personally have owned the Electa Amator SF speakers, with the same exact drivers as the Merlins. I've integrated subwoofer systems with those, ran 'em both full range, and crossed over with a digital pre/pro(for movies, rock, techno, whatever), and have gotten just about as good of a sound as you could want for the money! I think you could do the same, potentially even better, with something like the VSM's if you know what you're doing(like with anything else in this hobby).
So, I guess what I'm saying, from having heard the VSM's in SO MANY SET-UP'S at CES and other high end show's, is I think the VSM's are, yes, overall up there with the bass "PASSIVE" DESIGNS OUT THERE. While they can't hang dyanamically in a large room with somethign like a pair of Avantgard horns with active sub's, they have their advantages in off axis listenability, and can come close enough in the right room/set up to give world class overall sonic performance in the right hands! Get the subs out though, cause they'll need em to cover all the material that's out there, should you listen to enough of the REALLY dynamic stuff.
Overall, I know I could get great sound from a pair of Merlin VSM's. Infact I owned the littler TSM's, and they were a nice speaker for the money...
If anyone had the "umption" to try, I wonder what if one could get even more dynamic world class sound from a pair of VSM's by bypassing the crossover and using an outboard "active crossover", and biamp em!?! I would be interested to try sometime.