Bigcountry, when you said the .25-06 is a tad "overbore" did you mean it's "over kill", or that it really is "overbore"? I've never heard that the .25-06 has issues of overbore (more powder than it's bore can really burn), I've always understood it to have a pretty good relative bbl life, and pretty low reports and muzzle flash (in the right loads of course), which are all indicators that it's not overbored....That's just my experience, which I've not had a terribly large amount of with the .25-06.

As far as being over KILL, yes, I'd agree that it's a tad over kill for varmints, however, serving double duty, I'd say it's a good choice.

There are a great number of rounds that would serve this niche, the .243win or WSSM, .25-06, .257Roberts, 6mmPPC, 6.5x55swede, 7x57mm mauser, 7mm-08, 7-30waters, and the list goes on and on. My choice would probably be the 6mm PPC, but it's not typically a good choice for most people (good luck finding one, then good luck finding ammo-which you'll pay premiums for). The 7mm mauser or 6.5x55swede mauser are also great rounds that you should consider.

Just from your two, I'd go with the 7mm-08, in a compact rifle...but my suggestion would be either of the above metrics or the .243WSSM.