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According to them, Kloxo is suppose to be a revamped lxadmin, new infrastructure, fixed bugs, etc, like a whole new thing. Supposedly finally able to support CentOS 5 fully.
That being said, there was a topic in the forum that discussed the new name change, and the owner guy said that "lxadmin" wasn't professional enough, and he wanted something that stood out like 'google' or 'apple' does.
So they came up with 'kloxo' because it's two syllables like all the other popular places.