I own the Monitor 40.2's and the (35th Anniversary) Compact 7 ES3's. I have auditioned ALL of the Harbeth speakers over the last 10 years with all types of gear. All of them are superb, and each has its own best application. The fun part is discovering the types of systems and genres of music with which they most excel.
The Monitor 40.2 is by far the most beautiful, natural, and accurate speaker I have ever heard. It truly is a reference monitor as many reviewers have described, and I feel privileged to own a pair. It's a speaker I can listen to for hours and never feel fatigued. I can't say enough good things about them.
The Compact 7 is, in my humble opinion, the best all-around two-way speaker you can get. As I understand, it is Harbeth's top seller. If this is indeed true, I'm wouldn't be surprised. I run them with McIntosh solid state and ARC tube gear, and they always sound fantastic. They are not as detailed or forward as Harbeth Monitors (40.2, 30.1, and P3ESR), but they are warmer and more flexible than everything but the 40.2's. To me, they are the perfect speaker for a small- to medium-sized room, with or without a sub. I occasionally run a REL S2 with them, depending on the type of music I play.
Bottom line is, you cannot go wrong with Harbeth. If you can fit the 40.2's in your budget, you should get them. If not, I would go with the Compact 7, as I feel it offers the best sound for the money.
Happy Listening!