Horns can be as smooth and transparent as any speaker made. Like any other kind of speaker technology there are bad examples and excellent examples as Duke pointed out earlier.
Horns don't have to be all that big. For example you can have a quarter wave rear loaded horn in a small floor standing cabinet, that can go down to 50-60Hz. At that point its easy to set up a subwoofer system (keeping it below the critical-to-human-hearing 80Hz), which is not a bad idea anyway if you don't like standing waves messing with the bass at the listening chair. One of the best distributed bass array systems is the Swarm made by Audiokinesis; if set up with a quarter wave horn as I just mentioned, you can have a compact and efficient system without sacrifice of sound quality compared to much larger systems.
