7.1 speaker set up recommendation

I am building out a home theater, and have about 4-5K budgeted for speakers for the 7.1 channel setup. what should i spend that money on?
If your gonna run a reciever then get something very easy to run, Klipsh perhaps?
Check out the home theatre equipment reviews over at iar-80.com. This will give you some ideas about speaker characteristics and placement considerations for a 7.1 system. Then decide what to buy.
I would go 5.1 and get fewer, better speakers. Less cabling also. 5k, even used, is not enough for 7.1, compared to the sound 5k gets you for 5.1.
I use VMPS speakers, and VMPS passive subs. Easy to drive, great bass...and have the ability to play loudly, without distortion.

Receiver is an Onkyo 805, and two Onkyo M-504's to drive the 4 subwoofers.

Note: I just upgraded to seven channels around two months ago...it is much better than 5 channels in my fairly large room.

Well I do VMPS to for mains and center but was trying to keep it simple lol. I doubt 5.1 VMPS CAN BE DONE FOR $5k, CLOSE but not sure you can get there. Dave......nice digs!
BTW VMPS rocks for HT and ofcourse music and is rather real world priced in the big picture of audio.
Active speakers are the way to go. This 5.1 setup will run you $3.5K: http://www.bhphotovideo.com/c/product/468527-REG/JBL_LSR4326P5_1_LSR4326P_5_1_Active_5_1.html
Give Totem speakers some serious consideration at this price point. I second the recommendation above that getting better individual speakers and staying with 5.1 at this price point is advisable. At most, consider going to 6.1 (1 surround back speaker)so that you can enjoy THX Ultra2 and DTS 6.1 Matrix-ES post-processing on traditional DVDs (and the newer formats as well of course)...
as bob reynolds suggests. i recommend mackie thx active monitors with xlr cable runs. they are every bit as good as the mfg claims. i use them for center and surrounds but will eventually be acquiring a pair for the fronts to separate my 2 channel rig from ht. of course you will need a processor with balanced outputs.
I have a pretty satisfying $5K Usher setup (7.1) at my shop...

Main: BE-718
Center: S-525
Sub: SW-103
Rears: S-520

Budget busting upgrades include:
- BE-616 center channel
- X-719 rears
- Lottery winners can move the BE 718s to the rear and replace them with a pair of BE-10s or BE-20s (-:
I second Boston_high_end and forgot to include Usher when I mentioned Totem above. Usher is another brand that gives great sound/value for less than many other speaker manufacturers....
5.1 allllllllllllllll the way. Unless your room is a rectangle and your seating is in the middle facing one of the skinny walls. Even then most movies, even new ones are 5.1. not only that,in 7.1 movies the surround back speakers dont have a dedicated audio track for them as a 5.1 system/movie would give. the fact that the correct setting on your reciever for a 7.1 movie is dolby pro logic2 movie, should tell you all you need to know! If you want a more diffuse sound field in the back use a dipole/bipole speaker(preferably switchable so you can experiment).Dont waste your time on 7.1, doesnt sound as good at all.