I purchased the Logitech Z-2300 pc speakers because of its power output and great reviews. However the satellite speakers sound awful. Can i replace the 40w stock speakers with 55w Panasonic speakers from a home theater system?
The Logitech sub is 120w and houses the power supply.
It is certainly doable. I have completely "respeakered" my Altec Lansing PC system with Bose 301 mains and an Energy subwoofer speaker and box. (The sub had a blown power supply).
There are flaws but it is worlds better than it was!
My concern is whether the new speakers can cause any electrical damage to the system since the wattage is greater than the original speakers. Might the speakers draw too much power and possibly ruin the system?
The wattage figure you're looking at is irrelevant to the drain on the power supply. However, it's difficult to advise you, IMO, to substitute one speaker for another in a system such as you own. First, if the power supply in the sub feeds to built in amplifiers in each satellite, then no, you can't successfully make the switch at all. Second, the Panasonics probably do not play at the same level (measured by electrical sensitivity - not watts) as the speakers meant to accompany the sub. This would make for a mismatch between the two components and the balance of bass to high frequencies will be destroyed.
In general, I'd advise against such a swap since there are too many possibilites for failure. It's your system, however, and you can try if you like, there's a 50/50 chance you won't blow up anything.
In the future I would strongly suggest you audition speakers before making a purchase. Do not buy audio gear based solely on the specs you read on paper.
I did a similiar thing with my cambridge soundwork pc system years back and some wharfedale bookshelf speakers. Nothing blew luckily and it sounded pretty good. The problem I came across was with the subwoofer as I soon realised it was inadequate. So I bought an amp and from there it started.. You may begin to dislike that logitech subwoofer!