For $125 it should be a no brainer. Based on everything I've read and being an owner of the older AVR 1600 (that has been rock solid for 3 years now) and being of the mindset the Audyssey is a love it, hate it or be indifferent to it thing, especially the lower end version I would for sure jump on the HK 1700 for that price.
And whose to say that Audyssey would do a better job than HK's EzSet Eq in your room. It might make things worse, dull, lifeless, compressed etc....
Klipsch RF-62II, RC-500, RS-400, SVS PC12+,
Def Tech SC8000
Harman Kardon AVR 1600
PS3, Apple TV, Sharp 70" Qattron