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you are right, the store guy has no clue. the efx500 will effect a bloody radio signal so long as the radio has a line out! so no, you don't need a cdj at all.
as far as the comparison between the kaoss pad 2 + efx500, i had a similar dilema when purchasing my effects unit. my conclusion was to get the efx500, simply because once you learn to do it on that, you will be able to use pretty much any other effects unit/mixer just as well. the kaoss pad is very good, don't get me wrong here, but the efx500 makes it easier to recreate a sound you have done. the kaoss pad has so many effects and parameters its often hard to recreate a sound again, which would piss me right off.
to be honest, the efx500 suits what you play (techno) a lot better. most of the kaoss pad effects are variations on the same basic filter/flanger/phaser with the curve being controlled on the xy thingy. the efx500 has a bit more of a broader spectrum of basic effects, but not any variations of these effects. the beat effects are fantastic, and although it only looks like it has 8 effects, it actually has 16, in 4 x 4 configuration. with the efx500 you essentially get 2 effects units. one is beat efffects; echo, delay, LFO flanger etc etc, which then runs in series to the jog effects section, which has more of the curve based effects like another flanger, zip etc etc. this means you get an entirely new effect when combining 2 different effects.
another thing going for the efx500 if the controllability. once you know where everything is, its a piece of piss to use, and its layout is extremely user friendly.
if you are rich, look at the efx1000, but you need to have about $999 in the bank first! on the face of it it might not look like its worth the extra $'s, but believe me from looking hard at the specs, it is!
to be honest, there isn't really any other effects units that compare to the efx500/1000 or kaoss pad. the alesis airfx look cool, and sound cool, but they are very limited in their uses. most of the other effects units on the market are single effect boxes, for example a stand alone filter, or flanger.

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MUGGETS
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