It's possible to get a good usable 40 Hz out of some designs.

The designs may not be conventional, ie corner loaded single driver horns and such. Not sure what is out there for commercial offerings, but plenty of DIY stuff that will fit the criteria.

Is it even possible to get full range out of a smaller room?  Even assuming near-perfect acoustics, most smaller speakers aren't rated very low.   

My premise: I'm (perhaps mistakenly) assuming that adding a sub to a small two-way would just recreate the same problems as having big speaker/small room.

It can be done, yes, although if by full range you mean <20Hz, that's going to be tricky. There's just no easy way to get into the infrasonic range without a lot of air movement, which is tough in small spaces. Getting reasonably full range response shouldn't be a problem though. A good monitor should be reasonably flat down to at least 55Hz, so subwoofers will be needed to fill in the rest.

The best way to position a subwoofer is to place it at the intended listening position, then walk over to where you were thinking of placing the sub. You just move around until you hear what sounds like the most even response, and that's where you place it. Room analyzers will make that a lot easier. For a second sub, start at the opposite side of the room from the first sub and work from there. With a full range speaker you can't do any of that. You place the speakers where most of the FR sounds best, and the bass just is what it is, there's not much you can do about it.

From there, you can use corner traps, tri-traps, and ceiling traps to smooth out the response. Suckouts are the worst problem because they can't be fixed with DSP. If peaks are still an issue, you can use DSPeaker's subwoofer EQ boxes to tame those.

Aside from all that, a big speaker necessarily means a larger cabinet, and the larger the cabinet, the more of an impact it has on the sound. The "disappearing act" is when the source of the sound can't be located, it just seems to be coming from free space. Two-way monitors do this better than anything else because of their small size. The larger the speaker, the harder this trick is to pull off. Skinny floorstanders like Audio Physics do a pretty good job, although of course such a narrow baffle means they can only go down to about 35Hz or so, which may be enough depending on the type of music.

The reason is that because "forward-radiators" don't really do that, at least not through most of their FR. They are omnis in bass, and from there the sound hits the front baffle end bends around the sides until you get into the HF range, where eventually the tweeter will start to beam and the width of the baffle will no longer matter. This is a pretty good primer on the subject:
http://www.linkwitzlab.com/diffraction.htm

There is one exception to the rule: flow-resistance speakers which are pretty much the only "true" forward radiators. I haven't heard one in a small room, but in theory they should be fairly immune to *most* small room problems - they send pretty much nothing to the sides and rear, so close wall placement necessitated by a small space basically shouldn't matter because you won't hear the reflections with a time delay. As with any box speaker though, they'll still act as omnis in the bass region and thus will require some bass trapping.

I was talking about this at one room at RMAF. The idea is that you have several hefty planar magnetic line source mounted to a wall working down to 80hz & backed up by a thin transmission-line sub.  The system control has a built in Audessey XT to integrate all of the units, add a couple of minor room treatments and you're left with a superb full-bandwidth  concert-volume setup in a room as small as a bedroom. If you're so inclined http://www.wisdomaudio.com/products_wisdom-series.php. Systems which incorporate horns are trickier in terms of taken up space, amping and positioning, from what I understand.

Pretty cool but $30K, yikes.  Well beyond my means. 

It can be done, yes, although if by full range you mean <20Hz, that's going to be tricky. There's just no easy way to get into the infrasonic range without a lot of air movement, which is tough in small spaces. Getting reasonably full range response shouldn't be a problem though. A good monitor should be reasonably flat down to at least 55Hz, so subwoofers will be needed to fill in the rest.

I meant 20-22hz to 20khz by "full range" / btw, that whole post was v. helpful. 

I think I've already experienced the 'smaller cabinet, more disappearing effect' effect in practice, I use a floor standing 2-way right now in my "small room", and while the baffle is relatively narrow I recall that the stand mounted version of this exact 2-way disappeared more when I auditioned it.

Are pro compact monitors and non-pro compact monitors quite different, or do the undesirable qualities you warned about in the "what do you value in a pair of speakers" thread about pro monitors ALSO apply to most non-pro compact monitors?

By non-pro compact monitors I mean Wilson, Harbeth, Devore, Gallo, etc. 

Excerpt: "Pro monitors definitely have their benefits, but also often have drawbacks as well. Many are designed as tools, not to be enjoyable in the listening room. What you get from these types of monitors is a rather matter of fact presentation designed to avoid surface reflections and give the mixing or mastering engineer as clear as possible of a response so that they can hear their mistakes and fix them. I do not enjoy listening to these types of monitors, they typically have terrible soundstaging (that's not the point) and are often rather boring."

I'm just aiming for a purer midrange rather than full spectrum. I can live with sound down to 50hz. Magneplanars are backwall reactive just like any other flat panel right?

Just an interesting story, I know of a guy with harbeth monitor 40's running some crazy setup in a small room but he plays real softly. Point is, I think big speakers can work in small rooms but you will have to listen real soft.

Are pro compact monitors and non-pro compact monitors quite different, or do the undesirable qualities you warned about in the "what do you value in a pair of speakers" thread about pro monitors ALSO apply to most non-pro compact monitors?

By non-pro compact monitors I mean Wilson, Harbeth, Devore, Gallo, etc. 

No, quite the opposite in fact. Most pros have terrible soundstaging, whereas traditional 2-way monitors absolutely excel at it, as I've been saying. I can't say I'm a particular fan of Wilson, Harbeth, or Devore though. Many of the Wilsons I've heard have been thin, uneven, and excessively bright, and I have a common issue with Harbeth and DeVore - I want to hear the driver, NOT the cabinet. Harbeth design basically hasn't moved much beyond 1976, and DeVore has serious problems with his crossover designs, which are only exacerbated by all the cabinet ringing. They're definitely better than Harbeths, but would I buy a Silverback at $15K? Not a chance.

This guy on the other hand I could listen to all day, everyday.