Dan,
After much research, I recently bought a powered subwoofer by SVS. The sub is incredibaly good, especially for the money. I purchaced the 16-46PCi directly from SVS - it comes with a 350 watt BASH digital amp and goes down to 16Hz. I am using it with my 2-channel AV system that incorporates Gallo A'Diva Ti speakers. The 16-46PCi is $650.00 - a bit more than you want to spend, but it is worth every cent. Also, it may be physically larger than you prefer, but smaller models are available...check them out.
http://www.svsubwoofers.com/subwoofers.htm
John