Hi Karim, and Welcome!
I was wondering if there would be any negative effects on the effectiveness of the baffle if a separate panel was mounted in front of the lower baffle panel.
You could do that if you wanted to, yes. It wouldn't look so neat as with John's system, but it would still work OK acoustically.
and that everything from the speaker down is one big broadband absorber -
That's correct: It is!

The entire section under the shelf and behind the absorber box, is a bass trap, where the active elements are "hangers".
Secondly, with regards to using active monitors with switches located on the rear of the speaker cabinets, can one just use a standard power bar with a switch on it to switch on and off power to the speakers?
Yes, you can do that too. Not a problem. Just remember to turn your speakers on AFTER all your other gear is already running, and to turn them off BEFORE you turn of anything else.
the Quested VS2108. I presume that these would make suitable candidates for flush mounting due to their shape, front porting, low profile heat sink and the ability to attenuate low frequencies to deal with correcting the power balance issues associated with flush mounting.
Speakers do not have to be front ported in order to be soffit-mountable. It is entirely possible to soffit mount rear-ported speakers. Here's an example:
www.johnlsayers.com/phpBB2/viewtopic.php?f=2&t=20471 Those are Eve Audio SC-407s, which have rather large ports on the rear. And yet, there they are, soffit mounted and performing spectacularly...

So you don't need to limit your search to just front-ported speakers or sealed boxes. As long as the soffit is designed correctly and the right precautions are taken, there's no problem with that.
The heat sink is also not an issue. You just need to leave enough space at the rear of the speaker enclosure box (inside the soffit) to ensure that there is sufficient airflow over the heat sink, to keep things cool.
The V2108 does indeed have a low cut switch on the back, but it does not do what you need for soffit mounting. That switch is meant for use with a sub, as you pointed out, and it rolls off below 40 Hz., according to their documentation, it seems (although it's not very clear!). But that's not what you need. With a speaker that size, the baffle step response enter frequency will be fairly high, probably a few hundred Hz, and that's where you need to start the roll-off, in order to correct the power imbalance (or rather, in order to "uncorrect" the power imbalance correction that is no longer needed!). So that switch won't do what you want.
However, there's more than one way of skinning a cat, as the saying goes! Any good quality parametric or semi-parametric equalizer that has a low shelving filter on it will do the job. As long as it has enough adjustment in the frequency setting to cover the likely range, and at least 6 dB of roll off, that should be fine. If you also get to select the steepness of the roll-off, that's a nice bonus.
Finally, will I find any problems with flush mounting the Left, Centre and Right speakers in my front wall, but placing my Left Surround and Right Surround monitors on stands?
Ahhhh! So this is a 5.1 room! Hmmm... that's a little more complex... You'll need to treat the room rather differently, and design your soffits and the geometry for the surround speakers with great care, to prevent rear-surround reflections from getting back to your ears from in front if you... 5.1 control rooms are just a tad harder to design than plain old 2.0 and 2.1 rooms.
Will you be running a bass management system?
(The answer to your question is "yes". You can put your surrounds on stands, as long as the stands are massively heavy, and correctly located, and you have the right treatment on the walls next to them, and the front walls.
My room dimensions are L 6.85m, W ~ 3.2m, H ~ 2.5-3.5m (I will be building an interior ceiling.
That's rather confusing! So what will the height of the "interior ceiling" be? Will it be 2.5m, or 3.5m? ANd how will you prevent it from acting as a three-leaf system, in combination with the real isolation walls (which I'm assuming will be two-leaf MSM walls?).
I know I am probably covering too much information in this simple quert
, actually, not enough info! A diagram of your room, showing the proposed layout, the proposed isolation system, the proposed treatment, and the proposed soffit design would help a lot to understand what you are trying to do. So please do start your own thread with that information in it, as well as all the other information. I look forward to seeing that!
- Stuart -