I disagree with the premise that floor standing speakers have nothing to offer,
No one said floor standing speakers had nothing to offer. What was said was that they are not necessary. And bookshelf speakers are a better value.
although bookshelves are often a better value. First towers allow you to cross over to the subwoofer far lower than the far less than optimal 120hz of small satellites, and generally speaking they'll allow you to better fill a larger room. Crossing over to the sub above 80hz creates an audio ping pong effect where you can hear the source shift from the speakers to the subwoofer and back. By crossing over below 80hz you eliminate that effect. It doesn't bother everyone but I dislike it and suggest that you go with speakers capable of producing solid output down to at least 80hz and 60hz would be better - even if it means starting with a good quality 2.1 or 3.1 system and adding speakers as money allows. In a 17 x 23' room you should be fine with more capable bookshelves. If you can swing it I'd go with a 5.1 system based on
Ascend Acoustics CMT-340 SE bookshelves as mains (L & R fronts) and the center and their HTM-200 speakers as surrounds, though you may be able to get away with their CBM-170 SE bookshelves as mains. If you can't swing the Ascends then I'd look at the Pioneers that Bored suggested and then put as much as you can into the subwoofer.
I do agree with the others that Klipsch sub isn't a good choice. Assuming a 9' ceiling that room is roughly 3500 cubic feet (plus any spaces open to the room) and that requires a very capable subwoofer. I'd contact
Hsu Research and
SVSounds and have them size a subwoofer to the room.
I agree with you that it is a good idea to get main speakers that allow a lower crossover than 120 Hz. Capable bookshelf speakers, as you say, can do that, and that is what I recommend for someone on a tight budget (up to several thousands of dollars, actually).
I also agree that it is a good idea to go with 2.1 or 3.1 for now if there will be more money in the future. That way, there is an easy and efficient upgrade path, instead of having to get rid of lesser speakers when one upgrades, which almost always means a loss of money into the final system. It is for this reason that I also recommend to people that they generally start with one good subwoofer, instead of two lesser ones. The upgrade path then involves simply buying another identical subwoofer, instead of replacing both of the lesser ones.
Naturally, such advice is predicated on the idea that there will be more money in the future for upgrades, but that is very commonly the case.
And with the budget we are talking about (Take 5 plus $400), I would absolutely not go with a 7.1 system, as it would be better to buy 5.1 better speakers than to spread the money to two more speakers, even if there will never be an upgrade. In most cases, the difference between 5.1 and 7.1 is less than dramatic, even with 7.1 sources, but higher quality speakers will make a difference with everything.
I think it would be a good idea to look at the total budget, along with whatever is already owned, and what sorts of things one expects to get from the system (e.g., what sources are desired, etc.), and whether there will ever be more money in the future.