rega rs1 are within your budget and size criteria and sound very good--they work very wall at or near wall. also consider audioengine passive monitor (p4?)--surprisingly good for the price.
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The littlest guy in the Vienna Acoustics Schoenberg line-up (IIRC, it's called the Berg) might work. However, I think that it's priced right at the upper limit of your budget and will require a subwoofer.
I've also used the Gallo, pre Timrhu's recommendation and agree that it's a good choice. The VA costs more, but - IMHO - it looks and sounds considerably better than the A'diva. OTOH, the Gallo is probably the better value.