Two channel home theater set up

I am thinking of setting up a two channel home theater in my family room. I have an 80 wpc kenwood receiver but need advice with the DVD player and speakers. I am looking for some two way monitors ($400 max) and a DVD player with virtual or tru-surround capability ($300 max). The monitors should have >90 db sensitivity since my receiver is current limited and they should reach as low a frequency (45 hz preferably) possible since I am not planning on installing a subwoofer. Feel free to comment and suggest any speakers.
yeah my recommendation, and vast experience/knowledge, tells me you can forget the "no subwoofer" approach, if you expect good sound from you're movies. No speaker you're considering will sound anything less than strained, compressed, and/or distorted if you play movies through em full range(in place of a sub/where speakers ae crossed over at 80hz). I would strongly suggest you look into a subwoofer option some time and, in the mean time, go low low on the volume control for movies(which are about 5-10X more dynamically demanding than recorded music!
How big is you're room and how far back do you sit?..also how tall is the ceiling? It nakes a difference. If you have a small room, or sit close to the speakers, you can get away with more traditional music speakers. If you have a larger room, an sit further away(where the room reflections color the sound more), you should stay with the more "focused" designed speakers that are dispersion limited.
Also, what ratio of music/movies do you listen to. If you're mostly movies, look towards more dedicated movie speakers(i.e, THX designs, horn speakes like Klipsch's, etc.).
Give more info, and I'll make some recommendations...but do consider a sub(even if you listen low volumes) in the future...that's my suggestion
We have a jury rigged home theatre setup with a Toshiba TV, a Sony DVD/SACD player, and a Janis amp/crossover/woofer. I find that one really needs the woofer in this sort of minimalist setup. I agree with Lthkeepr.
I think you'll benefit from a subwoofer as well. Try looking into a used pair of NHT SuperZeros or SuperOnes and a used NHT SubOne, or consider a pair of PSB Alpha AVs and a matching PSB sub. Once you're done I think you'll be pretty surpirsed how good your 2-channel movie system sounds without spending the big bucks for a multichannel setup. Good luck and have fun.
I know it doesn't fit your description as they are bigger than a "two way monitor", but try looking for something like a pair of old Polk 10's. These can typically be had for well under $300 in excellent shape. While they are not super efficient, they do offer pretty reasonable sensitivity and extended ( if not slightly strong ) bottom end. The fact that they use two 6.5" mid-woofers will allow them to play reasonably loud without break-up while still retaining good reproduction of the human voice. Bottom end is reinforced with a 10" passive radiator. The soft dome will also help out with the SS receiver and typically "hot" sounding Hollyweird mixing that you get on most movies.

If their size is too much ( they aren't THAT big ), try looking for the Polk 7. It is smaller and uses a single 6.5" mid-woofer with an 8" passive but offers similar sonics. Obviously, max output and power handling will be reduced. I know of a pair of these for sale at a local dealer for $100.

In my opinion, you would be better off with one of those speakers than you would with a smaller two way even if you went to a small "HT" type sub later. For one thing, those speakers will actually work i a "music" based system. This allows you to use this as a secondary system with pleasant results. Besides that, most cheaper subs are pure crap and hard to blend. They shoot for high output and more "apparent" bass. This sacrifices extension and definition, but hey, most Best Buy and Circuit City shoppers don't know any better. If it "booms", it must be "powerful" and have a lot of bass, right ???

As to DVD players, look at picture quality first and if it will play cd-r's, etc... Just pumping the sound through a reasonable stereo system makes the audio portion of the presentation FAR better. I would not worry too much about the fake "spatializer" circuitry. If you can find it on a unit that does video well and can play cd-r's, that would only be icing on the cake. I mention the cd-r's as this is a nice feature to have and can be frustrating if you don't. One of the cheaper Sony DVD / SACD players might be a good option. Sean
I will second Sean's suggestion about the Polks. I have a pair of Polk 7s hooked up in my den that I bought used in 1983, and they're still going strong. Not up to today's standards in some ways, but for your purposes they (or the 10s) would fit the bill quite well. Certainly more and better bass than you could buy in your price range today, and still a very musical speaker. In those days, Polk liked to demonstrate how much their speakers sounded like Spendors.
The PSB Image line of speakers is highly efficient. I too would recommend a sub, the PSB Image line has a nice sub that is not too expensive, the Image 6. Maybe the Image 2B + the Image 6 sub would be a good set up.

I don't have enough DVD experience to give you any advice. However, I do have a question: why do you want surround sound capabilities on your DVD play if you are only using two channels? Maybe you were thinking of future upgrades / expansions?

Good luck.
T1: I think he's talking about a unit that can simulate surround through two speakers. Perhaps someone more familiar with it can fill in the details.
Bomarc, we recently changed the tweeters in one of my buddy's Polk 10's and the difference was quite staggering. The sound was far more open, detailed and spacious. He was so overwhelmed and "giddy" by the increase in performance that it made me laugh. The great thing about this is that they were a perfect drop-in with the same exact cosmetics. It was like getting a brand new set of much improved speakers for something like $60 ( if i recall correctly ). Sean
Thanks for all your responses. The polk speakers sound like a good idea. I think I may get some OK speakers for that budget, however, a decent sub-woofer may cost more than what I want to spend. The virtual surround DVD player simulates the surround effect and just requires two channels. It takes advantage of the inner-working of your ears (I think - I just do not know the details), the new BOSE 3-2-1 uses the same principle. Finally, I will just use my receiver as a pre-amp and run two spare marantz MA-6100 monoblocks as my amplifier. Feel free to provide any further ideas, specially anyone who knows about virtual surround sound.
Good listening, Salsero