What Integrated Amp & Speakers for $1,000?

My brother-in-law is finally going to take the plunge and become an audiophile. The process started when he purchased my old Basis 1400, w/RB300 arm. He then bought a Grado Gold cartridge and a NAD PP-1 phono preamp. (At this point, he ran out of money, due to his job situation.) Therefore, he is running this through a relatively inexpensive Sony, all in one box, HT system. (You can imagine what it sounds like, especially since it comes out in 5.1 surround. Yuch!)

Anyway, he now is coming into some money, and wants to build a decent system. Obviously he is going to keep the analog source. I can supply him with a CD source (an old Sony CDP 707ES), which at some point he will probably get a DAC and just use the Sony as a transport, but that is way down the road, as this will be his secondary source, as he really likes vinyl (Smart man!) I can also provide him with decent interconnects, speaker wire and speaker stands from my obsolete stereo accessory closet. (Don't we all have one of those!)

However, he is going to need a integrated amp and speakers.
(I will be lending him my bedroom speakers, some Paradigm Titans, until we find him some better speakers, based upon your suggestions.)

I have some clues on what to get for speakers (Paradigm Studio 20s or 40s, or Spica 50's or something similar.) He does not need deep bass as he lives in a condo, with neighbors on one side. (Plus, it will be upstairs, so floorstanders with deep bass would sound really boomy in his smallish sound room. So I guess I am looking for a really nice, inexpensive monitor.)

As far as the integrated amp is concerned, I have no clue whatsoever. (I have never owned one, having always had seperates.) I could guess and get him a NAD or Adcom, but it would be strictly that, a guess. (If the integrated has a decent phono preamp built-in, the price can go up $50, as we could sell his NAD PP-1. The NAD is okay, but nothing great. I would rather had something better actually.)

So here are the guidelines:

Integrated amp and speakers for $1,000 combined.
Buying used is best.
If the integrated amp has a built-in phono preamp, the budget goes up to $1,050.)
Tubes are okay, I think. (At this price range, I am not sure he can get into tubes, but they would probably sound better than any SS at this low price range.)

Thanks in advance for any help you can give us!
Two things are going to define your b-i-l's system: his vinyl rig, which is already set, and his speakers. While it's been swell of you to help him to this point, I think you're doing him a disservice by continuing to drive the process here. Let him go shopping for speakers, listen to what's out there in the sub-$1K range, and learn something about what he likes. (Meanwhile, he's got the Titans, which ain't half bad.)

If he must buy used, un-heard, however, Studio 40s sound like just the ticket.

For amps, NAD, Rotel, and Adcom all make competent if unexciting gear. Find a good value in something of fairly recent vintage, and you won't go wrong. I'd stay away from tubes for a first system. That's for real hobbyist-tinkerers, and he isn't there yet.
I'd recommend McCormack Micro Line Drive preamp and...
active Mackie speakers -- Whatta knockout deal for a-bit over half-grand! It's a pro studio near-field monitors that you can get from www.themusicfriend.com.
Later-on when you sell Nad PP1 you may go for the matching phono pre McCormack Micro Phono Drive.
Consider the NAD 320BEE integrated ($320 used) driving a pair of Von Schweikert VR-1 monitors ($500 used). I am happily living with this combination after downgrading from a Mark Levinson amp/Wilson Watt Puppy speaker combination.
I recently downsized to a Roksan Kandy III integrated (115 watts) with phono stage driving Vandersteen 1Cs and am extremely satisfied with the sound. The Vandersteens replaced VonSchweikert VR-1s in my small room. Sweet and simple. Good luck.
Another option would be a used Audio Refinement Complete integrated for about $500 and a used pair of Sequerra Met 7 monitors. No real errors of commission here, just very decent sound.
These 2 could make very good pairing: Onix A-60 MKII and Usher S-520
Good luck.
ONIX A-60 (British made) integrated, Buggtussel Cicada speaks.
Epos M12 and Creek 4330 integrated are about $800 and make great music.
I just compared the Nad 320BEE above to the Cambridge Audio 540 integrated. The Cambrigde Audio unit sounded better IMO. Clearer and more articulate. For 300 bucks, it's hard to beat.