Purpose: Photon counting x-ray detectors (PCXDs) are an important emerging technology for spectral imaging and material differentiation with numerous potential applications in diagnostic imaging. We report development of a Si-strip PCXD system originally developed for mammography with potential application to spectral CT of musculoskeletal extremities, including challenges associated with sparse sampling, spectral calibration, and optimization for higher energy x-ray beams. Methods: A bench-top CT system was developed incorporating a Si-strip PCXD, fixed anode x-ray source, and rotational and translational motions to execute complex acquisition trajectories. Trajectories involving rotation and translation combined with iterative reconstruction were investigated, including single and multiple axial scans and longitudinal helical scans. The system was calibrated to provide accurate spectral separation in dual-energy three-material decomposition of soft-tissue, bone, and iodine. Image quality and decomposition accuracy were assessed in experiments using a phantom with pairs of bone and iodine inserts (3, 5, 15 and 20 mm) and an anthropomorphic wrist. Results: The designed trajectories improved the sampling distribution from 56% minimum sampling of voxels to 75%. Use of iterative reconstruction (viz., penalized likelihood with edge preserving regularization) in combination with such trajectories resulted in a very low level of artifacts in images of the wrist. For large bone or iodine inserts (>5 mm diameter), the error in the estimated material concentration was <16% for (50 mg/mL) bone and <8% for (5 mg/mL) iodine with strong regularization. For smaller inserts, errors of 20-40% were observed and motivate improved methods for spectral calibration and optimization of the edge-preserving regularizer. Conclusion: Use of PCXDs for three-material decomposition in joint imaging proved feasible through a combination of rotation-translation acquisition trajectories and iterative reconstruction with optimized regularization.