The Klipsch speakers usually work better in larger rooms where the horn tweeters don't dominate the sound. They're not the best choice for smaller rooms, but in larger rooms, the sound becomes more natural and any harshness that's heard can be dialed out by bumping the treble control(s) back a notch or two. Not to mention they're pretty efficient speakers also. They can make even a moderately powered receiver play them to "bring down the house" levels. Good bang for the buck for home theater.
Paradigm makes some real smooth sounding speakers and also some pretty hard hitting subs. The subs I've heard sound very good to the point it's hard to tell by listening what size sub is playing. When I was listening to some subs at a local store, I thought he had switched on a 15" sub in the corner, then come to find out he had a Paradigm 10 incher playing. When I didn't see a Paradigm sub in front of me at all, he then showed it to me and it was actually behind me.

I was surprised. It sounded good enough to where I couldn't locate it even after a 4 minute car chase scene. Can't really go wrong getting damn near anything in their line that will fit your needs.