I'll second the Paradigms, even though I don't own them. But I'd suggest the Paradigm mini monitor. The performance series (atom, titan, etc) is nice enough for the budget minded, but if you have the budget, go for the monitor series. If you're coming from towers to bookshelves, you'll definitely want a sub, which I'm assuming you'll keep your psw202. At the same time, a bookshelf that can extend a little would be a bonus. The mini monitors, to my ears, had absolutely incredible low end to them when taking their size into consideration, not to mention a beautiful overall sound...it could be b/c they're 12" deep. Really nice sounding and a nice, compact size. I teetered on the edge deciding between these and my 601's...went with the 601's b/c of center channel speaker consideration. B&W 601 s3's, which go for about $450, are a little over your budget, but nice sounding enough, excelling at music really. Being that you're running a sub, the 600 s3's can be had for $350.
It just occured to me, is your budget $300-$400 for your bookshelves AND your center?...you'll want a matching center regardless of what pair/brand you buy, so is there an additional budget for that, or do you want L/R and Center for $300-$400?