Best $500 System?

I'd go with a NuForce DDA-120, an integrated amp with a nice DAC. It is an Absolute Sound Editors Choice at $499. Currently on sale at Audio Advisor for $299. Available in black or white. It comes equipped with a Bluetooth dongle. 
If your friend has a DVD or CD player with a digital coax out, buy a cable & hook it into the NuForce 's digital input.You avoid the cheap internal DAC in the player and now have a CD transport connected to a very capable DAC & great amp. If she doesn't have a player or it doesn't have a digital out, (optical or coax - the NuForce handles both), then  buy a DVD player with a digital coax or optical out. Best Buy, Target, and other discounters have a variety for $35-50. I'd stick with a major brand, like Sony, Samsung, Phillips, or LG. The DVD players work, but are usually slower to cue up than a CD player. On the speaker front I'd go with Pioneer SP-BS22-LRs. Best Buy usually has them at list $129 pair, but periodically takes them down to $100.  I'd try Audio Video Logic on line, they have them on special at $99 a pair. Not sure if they would ship them for free, but they are excellent retailers/enthusiasts -so talk to them. Usually Best Buy will match a bonafide authorized retailers online price, but if it is a wash give the specialty store your business and start a relationship. I've owned the Pioneers (as well as the other Andrew Jones darlings the ELAC- B5, B6 & UB 5) I think the NuForce amp and Pioneer speakers would have great synergy. Should be a nice system for CDs and Bluetooth streaming.

Sorry to hear that your friend is going through a rough time. Music is certainly good medicine. Is she interested in a casual, soothing background music experience, or sitting in the sweet spot in a dark room and doing active listening?

I think she likes active listening as well as dancing around to tunes

The DVD player I have has HDMI and then component out. I like Nuforce, have their reference 20 mono amps myself in the big rig

Bet those Reference 20s sound good!
Too bad there isn't a digital audio out of your CD player. Often a digital coax output is nestled among the component connections. The nice thing about the NuForce/Pioneer/DVD/CD system is that it's all new, with current technology and warranties. 
If you do need to go the DVD player route, there are a wide variety of prices & capabilities. At the upper end,($45-80), the DVD players have higher video resolution and streaming capability (if she wants to take advantage of the video capabilities),and still be below $500 total.
FYI (for down the road)-Last Christmas season, authorized dealers were running the compact Pioneer SW-8 MK2 subwoofer for $99 on Amazon. It's  a great match with the Pioneer bookshelf system. From your first post, it doesn't sound like she is focused on bass performance, but when you add the sub, tuned to a barely perceptible level, the combo becomes ridiculously good from top to bottom. In addition to a line level subwoofer out, the NuForce has an analog input so you can run a turntable at a later date , (with an outboard phono preamp). You can also use your CD connected to the analog inputs, without running it through the NuForce's DAC if you are really trying to save money.
Parts Express has a 24" steel stand for $55 pair that work well with the Pioneers.