Had this setup 10 years ago....
but left it for my ex-wife when we split up.
I can confirm that those S1 series satellite speakers can image with the best of them. Yes, the woofer has a crossover setup in it so that you run the satellites from it. That's the pressure-clips on the back where the wires go.
As I recall, M&K also made some sort of 'remote control' device that interfaced with the satellites, which accounts for the extra 2 terminals on it. If there's documentation available, it will discuss that option. You might want to check the M&K site as they have a lot of older product documentation there, too.
It seems to me that M&K has remained one of those companies who pioneered the sub/sat concept, getting it into consumer's hands, etc but never seemed able to build the channels of distribution and invest in the marketing needed to have the brand recognition. Still, outstanding engineering appears to remain their forte.
BTW, I believe there were about 3 different versions of this setup with different plate amps, and different versions of the sat speakers. The eBay auction appears to be the 1st version.
Cheers,
David