Now for the sub, I have about 8800 ft^3 of space (the direct area of the speakers is 12 X 16 but it is all open concept)
I am thinking of going with 1 Dayton Audio 1200 now and add one down the road when I scrape up some extra coin. Should I do this, or just buy a better sub now? The acoustics in this basement space suck, as the ceiling will be left exposed, so I don't want to spend a ton of money down here.
I agree with everyone above. If your budget is limited to $1000, just get a stereo pair of speakers. You will get much better results and much more longevity out of buying a $1000 2.0 system vs a $1000 3.1 system. Especially in 8800ft^3. That is a LOT of space. You will likely need at least 2 bigger ported subs to get full and balanced bass response.
Yes, there are smaller and cheaper subwoofers, but something like an RSL 10S or an SVS PB1000 (some of the better options at $400-500) would at least in my mind just be disappointing in your space. If you wanted to test, you could always buy one and just return them if you aren't satisfied. RSL(30day) and SVS(45day) both cover return shipping. PSA does 60 day returns but i don't believe they cover return shipping.
Not sure what your objectives are but as many have said you will likely need to spend much more. If you are creating a space for the family to just watch a few movies and have better sound than the TV then just buy a 5.1 system or soundbar system and be happy with what you get. If you want to put in a higher end sound room or a theater room then you will need to spend a lot more. For that size room in the end you will probably want to use two subwoofers and I would budget about $1500-2000 each. That's on top of the surround system, which will be a lot more.
Best thing to do is decided what you want in the long run. Then allocate you funds to build it over time. The people on this forum can help you plan this out. There are a lot of experts here.
Here it is... All the information you would ever need to build one. I tried it and now have 4 DIY Subs.. lol 2 Mini Martys. , 2 Sealed, and then the 1099's.. Its a DEEP RABBIT hole.. With no end in sight.. Its very addictive. lol