Has the male not even tried to blow a nest? (you may not have caught him trying to yet though of course)
Would you like to breed them? The reddening suggests the male is ready to spawn but is the female nice and 'fat' full of eggs as well? If yes, they sound like they are ready.
Seeing as you say you have another tank to breed them in (hopefuly at least a 10 gallon?), all you need now is lights and a tight-fitting hood to go with it, a heater, an airstone and, if you like, a small sponge filter (optional).
You should condition the pair on live/frozen, rich foods until the male is at least attemtping to build a nest and until the female looks like she has eggs. Put them both in the breeding tank. Add a ceramic pot and a floating plant. Keep the bottom bare - it is easier to clean and easier for the fry to find food and the male to pick up fallen eggs. Raise the temp to around 80 deg. F. If the male still doesn't build a nest, lowering the water level and ensuring water quality is good and there is no current (keep sponge filter, if any, and airstone off - they are not yet needed) might help.
When he builds the nest, he will then entice the female under it and they 'embrace' (like bettas do). The eggs are released and he fertilises them. The male will now start collecting any eggs that didn't float up, into the nest and begin to guard them. Unlike with other gouramies, pearl spawning is usualy less violent and the female should not be harmed. If you see any real violence or damage being done to the female, it can mean she isn't yet ready so take them both out/condition for a little longer. Make sure, BTW, that you don't mistake the nupital embrace for violence.
Once the laying of eggs is complete and the male is guarding the nest, take out the female and the ceramic pot (I put that in to give her a place to hide if necessary). You may now choose to turn on the filter (sponge) but only if it will not be causing any major surface disturbance. Realy, I preffer to keep it off until the fry are free-swimming (at which point you should also turn on the airstone).
Don't feed the male during this time. Let him guard the eggs/newly-hatched fry and don't disturb him. Once you see the fry swimming around and the male can't seem to keep up with them any more, it is time to take him out too and let him join his mate. Now you need to have a culture of microworms ready to feed the fry. However, you may also find that the smallest of the fry need infusoria so have a culture of that growing as well. Some egg-layer commercial liquid foods have worked for me in the past as well for very small fry that cannot yet eat microworms. The fry grow incredibly fast so they will all be large enough after just a couple of days to live off a diet of microworms alone. You can also try them on baby brine shrimp but I personaly don't trust this as a first food because if any of the shells are missed and the fry swallow them, they can die of all sorts of problems.
As soon as the fry can eat powdered commercial flake, feed them some as well so that they don't end up hooked on just worms. When they start growing bigger, start to vary their diet more and include plenty of protein-rich foods to aid with growth.
During the first week, the fry will not yet have developed a labyrinth organ so oxygen in the water is quite important. Also, these tiny fry are quite fragile. Invest in a white bucket so you can see if you have sucked up any fry after daily water changes and return them to the tank. If you had lowered the water level to encourage the male pearl to build a nest originaly, you will find that this also helps by making it easier for fry to find food. However, it also means that, as you'll be feeding several times a day during the first week and with all the quickly growing fry to contend with, the water quality can and will deteriorate quickly so water changes are even more important and you will want to fill the tank up to its full capacity after just a few days, deffinately just before the fry reach their most fragile stage at one week old (while they are developing their labyrinths).
Well that's basicaly all there is to it. You may want a larger grow-out tank for the fry as they grow but you probably won't get more than about 10 fry this first time you breed. Do keep in mind though that potentialy the pair can have quite a large number of offspring numbering regularly right up to 50 (though potentialy many more). You need to have homes lined up for them or know that your LFS will take them while they are still quite small. Remember that you will need tanks for them ,up until they hit about 1.5-2" at least, though, before you can offload them to your LFS or re-home them.
I hope that helps and that you will try your hand at breeding them. Pearls are absolutely wonderful fish, very rewarding to breed and extremely interesting to watch.
. While I was watching them this evening though I noticed something very different in their behaviour, they where facing each other and moving back and forth as a pair, sometimes in almost kissing range other times up to 1/2 and inch apart, it was like like a dance, they broke off occasionally to surface breath. Has anybody seen this before, or know what it is? I thought it might be courting of some kind considering his gotten real red, but there has been no atempt at a nest (although with no surface plants etc. I can understand why not). NB I can trans fer them to a suitable breeding tank if its reccomended.
