Is the CS20 that much of a critical upgrade? It is currently twice as much as the CS2. Is it better to get CS20 and less expensive LR speakers or my original upgrade setup?
Cost is always a concern. It must have been over 3 years ago, I bought Polk R50's that seem to be the same as the speakers that you are thinking of purchasing. It is highly preferable to match the center speaker to the same drivers as are in the fronts. I would not suggest buying something because it is cheaper, unless you are willing to ditch that center down the line when you have more funds. My R50's ran $70 each. In a home theater system, the most dominate speaker is the center speaker and you will not know the difference until you change it out to something better. I would hold off on buying a center speaker and just use the center from the Onkyo HTIB until the time that you have more funds.
Another possibility for your fronts would be Infinity P363s which are now on sale at Fry's for < $200 for a pair of them. That's $100 each+tax. You will need an AVR which puts out a real 100 watts/channel. Add to your system as you can afford it with the Infinity center PC350 or PC351 and the Infinity bookshelves P153s or P163s as your surrounds, sometimes onsale on Amazon or elsewhere, like @$49.
For its price, the R50s were more than worthwhile at the time, but I have ditched all of them at least two+ years ago - and I bought six of them. Don't forget the sub. Just put your system together in pieces - I know that it is hard, but the reward makes it worthwhile, unfortunately users want it now. Or you can go with the upgrade path overtime and spend more money. I started with an Onkyo HTIB system and all of it is long gone through a series of upgrades. So I am giving you practical advice based upon direct experience.
I think I've decided to go with the Monitor40s and the CS1 (or 2, not sure yet). Think it fits my situation better. Tight budget, living in an apartment, already have stand for my current fronts and whatever money I save/don't use I can use to upgrade my woofer and rears down the line. Or replace the LR fronts and use the 40s for rears.
Don't know much about receiver wattage but my Denon 1612 and the CS2 is well over that.