HUZZAH!! 20L just so happens to be one of my FAVORITE tank sizes to plant - good call!!!
Six out of seven of my planted tanks are just plain old sand. The seventh is plain old gravel!
You don't need anything fancier than a $3 bag of play sand (like you'd put in the boy's box out back). And if you LIKE the gravel you have now, you can just plant it up! You can make this as cheap and easy or as expensive and difficult as you want!
Fluorite is not necessary (though you can
go that route if you wish - I never have). The only thing to bear in mind is that some plants, like Crypts and Swords, are heavy root feeders - so you will need a root tab (fertilizer) in the substrate by their roots (if you decide to keep those types of plants, and you will ^.~). Root tabs are pretty cheap, and last a few months, so no big deal at all (IMHO!)
People mix sand and gravel all the time, but I prefer one or the other. Much easier to clean that way. The two WILL get mixed up, but you like the look, go for it.
I'd recommend straight sand - but that's ONLY
because it's what I prefer aesthetically and I think it's way easier to clean. My plants don't seem to have a preference. ^_^
I've done a substrate transfer with and without fishums in the tank, it's possible, and people do it all the time. In my experience though, it's MUCH
easier to do it without them (remember, I'm a worrier). It really depends on what you feel comfortable with.
If I were in your shoes, I would fill up the 20H, put the gravel and filter in there (instant cycle!) and transfer the livestock while you re-set-up the 20L. When the 20L sandy and settled, move everyone back with their original filter. If you're feeling extra cautious, grab some of the wife's (new) pantyhose, give 'em a good rinse, and stuff them with gravel to bring extra seeded media back in, but you should be fine with just the filter currently on the tank.
As for filtration, I'll leave this to others. I have used both HOB and Sponge filters on smaller tanks with no issues. (Love my canister best, but my only experience with this is on my 55) The only trouble my HOB ever gives me is with my floating plants, but there are ways around this
(if you even want floaters!)
Honestly, since you already have the tank set up and running, you shouldn't have to put out money for anything aside from sand and plants. . .
OOOH!!! AND LIGHTS! (Don't forget to ask about the lights! Ferts are good, too! ^__^ )
SOOO super excited for this project, Wakeypoo. . . *DANCES*
*derp* I forgot about the dirty tank. . . 5 out of 7 are plain old sand. . . >.<