I have been a Klipsch fan for many years but after looking around at all the local options (including Klipsch) and internet options I ended up with Polk for my home theater and Axiom for a stereo system. Based on that experience and 18 months of hanging around places like this and audioreviews.com (and 3 years of living with a roomate with Klipsch) I will give you my completely unscientific opinion.
Klipsch products have an "in your face"/forward/whatever you want to call it sound that I personally like because it almost makes you feel like you are on stage with the band or in the middle of the movie. It is not for everyone and since my wife doesn't like it we didn't go with Klipsch (I may have done so if left on my own). It is also not "neutral" which is what you really want a speaker to be.
Axiom makes as good a speaker as you can find for the money. I don't own their surrounds, but from what I can gather they may make the best surround speakers at any price.
Either system will seriously impress anybody who hasn't heard a great home theater system, but I would go with the Axiom system (even if left to my own devices) at this point unless you really love the Klipsch sound. Axioms will have more detail with a more neutral sound and better surrounds.
As for the sub, I have a Velodyne CHT 12 that I love and I can't imagine having "more" sub as I only have it turned up to about 25% max volume. Many here will suggest SVS or Hsu over Axiom (350 or lower) or Velodyne as Hsu and SVS seem to go lower with better detail, but my personal opinion is that there is a lot of sub overkill/excess. So what I'm really trying to say is that if you can afford the 500 and want a sub that has better sound and goes lower then get it because as near as I can tell from what I have read, it is incredible...but if you get the 350 (or any other good sub in that price range) I doubt you'd ever turn it up over 50% of the max volume or feel a need for "more sub".
