[Fish]

I have stared a few tanks by transfering water and LR from another reef and I don't really see a reason to wait a long time. If the water and rock has been in a reef for the past X years then what exactly needs to cycle? The glass? Because that is all that's changed.

That is going to be a real nice little tank. If I were you, I would top up the water, add some more LR, and get some better lights. No one uses the "watts per gallon" rule anymore because it doesn't really tell you anything. What kind of lighting do you have? It looks really dim. The watts per gallon rule suggests that reducing the amount of water you have in your system somehow makes your lighting stronger... it doesn't. Some animals have minimum requirements, and those minimums don't change just because we decide to put them in a nano tank.
I went down the same path you're going down and I know that some of those "getting started" articles online have some really bad advice. When I first started my 2gal nano, I had a 13w power compact (I thought, 'hey 6.5 watts per gallon'), but it became apparent that it wasn't even enough light for my zoanthid corals. I switched to a 70w metal halide which sounds like a lot in watts-per-gallon, but it's still fewer watts than a houshold lightbulb and really isn't a huge amount of light, compared to what these animals are used to in nature. I'm not saying that you need a halide or anything like that, infact maybe all you need is better reflectors, or high output bulbs instead. The best thing is too find out how much light your livestock requires. A frogspawn coral would need as much light under 5" of water in your nano as it would under 5" of water in a 2000gal aquarium. Hope this makes sense - I can be confusing sometimes.

- Chad