my setup is m&k S-150 for L/C/R, m&k C29's for surrounds. Its setup so the sub is pretty much seamless.
You really cant tell where the sub starts & the monitors take over. Setup with an SPL meter & frequency sweeps from all the speakers, 80hz crossover on the processor which is what the monitors are designed for.
I also use a BFD to tame some nasty peaks caused by my room, thats one of the best investments you can make to get decent performance from a sub, either sort out the room accoustics or cheat & get a BFD or sms-1 to take out the peaks, takes all the boominess out of the sound & just leaves the trouser flapping air pressure behind
a well setup sub really should not be very noticible most of the time, a lot of people who have watched films on mine have complained my sub is too quiet compared to theirs to begin with... I then watch & smile as a section of film with real LFE kicks in, the look of terror on their faces is kinda funny (cannon fire in master & commander is almost heart stopping at times, it flexes my bloomin door). When I listen to most peoples setup all I hear is booming & lots of distortion..
Done properly a sub (or 2 )can be a real compliment to a home theatre, but not too many are done properly.
As for dumping it all & getting a good set of stereo speakers, I can see the argument for this but I personally feel I have mine setup pretty damm spot on & really couldn't live without the surround stage any more (again, most surround setups I hear are pretty damm poor so I can see why good stereo can be a preffered option)