I had pc (power compacts) flourescents lighting my tank and they did ok. They're two skinny tubes joined at one end. This is what you're talking about, right? There was 4 of them for a total just under 400watts. Soft corals will do fine under pc's and, despite what many folks will say, you can grow hard corals under pc's. They won't grow as big or as colorful, however, and you have to put them pretty high up in the rocks. Since this is going to be your first tank I would't recomend hard corals anyway, they're just too touchy. There are tons of awesome soft corals too so it's not like your tank will be lacking without the hard ones.

As far as tank size goes, the bigger the better. Like you mentioned, the water quality can change more quickly in a smaller tank. Actually, it's not so much a quality issue as it is a stability issue. Salinity, temp, ph, etc, all change more quickly in a smaller tank. The water around a typical tropical coral reef somewhere like Figi is incredibly stable so that's what the corals and fish in those areas like.

Another thing about a bigger tank is that you'll be able to have a heavier bio-load. In other words more fish. Plus you'll have more variety of fish to choose from. Rememember, the ocean is a big place and not all of these fish want to be put in a little tank. Also, some fish never leave a small area and are perfectly happy in a small tank. The problem is that these fish are usually pretty territorial and will beat the shit out of any thing that comes into its territory. So, more space eqauls more territories.

What's your budget for the tank? I think before you mentioning $1700. I'd think you should be ok with this for a 65g. I was doing some calculations on what I'd spend on my next potental tank and I was figuring about $3K but that was for a 150g complete setup for hard corals.