which is your favorite inexpensive stereo system?

I friend of mine would like to buy a 1K (if less even better) two channel system for an small room. So I will appreciate your inputs on which systems (amplifier plus speakers) are your favorites. I just want to learn which system you can setup with those limitations and enjoy everyday.
Thank you for share your experience.

For the person you describe I generally recommend a low-powered NAD or Marantz receiver or integrated and CD player and some small bookshelf speakers like the PSB Alphas/Betas or the small Epos speakers. That's the way I started in the electronics, and for a small room those speakers should do a nice job. Going used might get you slightly better electronics or speakers, but if the person is just starting out I'd suggest they get the system from a dealer so they can hear it and make sure they like the character of the sound (for example, the difference between the PSB and Epos speakers, and all speakers in this price range, will be quite noticeable to even a beginner, more so than the electronics in this price range, and thus it would be good for the person to hear them to see where their personal taste lies).
If it were me, I would go with a vintage Kenwood or Marantz receiver, some advents or mission speakers, and used Jolida or Musical Fidelity CDP, or better yet a technics 1200 turntable.
Staying strictly within the $1000 price range, I would recommend a used pair of Totem Arros @ ~$700 paired with an inexpensive integrated amp such as those mentioned by others (e.g. NAD, classic Marantz 22XX series). I think he/she will appreciate the greater range of the Arros in the long run and will be happy most of the money was spent on them. If your friend can afford just a bit more money for the amp, however, I would strongly recommend the used Blue Circle CS integrated for sale right now. I've heard the Arro paired with the CS and the combination sounds amazing.
I'd skip the conventional separate amp and passive speakers approach completely.

Active speakers offer a much bigger bang for the buck. Add an NHT PVC (passive volume control) and you'll have more dollars going into the speakers where it matters most.

A pair of KRK VXT6 can be had for around $800. The NHT PVC Pro can be had for under $100.
My first system was sub-1k, and I used Kef Q1 monitors. I don't know if the quality went down in the meantime, because I now see they cost even less! Worth looking into. Second the NAD integrated, and even their CDP or a Marantz CDP, would round things up nicely with some left for cheap cables, connects, stands.
One pairing could be a lightly used Sophia Electric Baby integrated with Silverline Minuet monitors.May have enough spare cash from that Grover Cleveland to buy an ok used cdp.
I had a Denon mini system.
Sounded awesome really.
Comes with a sub woofer connection too.
Thank you guys!
All your options sounds great.
I'll try to make him go to a dealer to listen the different setups that you mentioned.
Thanks for your input..... at least now I can give him some recommendations! ;)
Go to Audio Advisor website and take advantage of clearance (if they have any left) of Cambridge Audio 540A or 640A amp and matching CD player, or if friend wants FM, the NAD C-720BEE Stereo Receiver. Many good bargain priced speakers available from NHT, PSB, Paradigm, Polk, etc.. With all due respect to some of the previous recommendations in this thread, some are fairly esoteric, and my guess is that if your friend is not an audiophile, he (or she) will prefer a solid, reliable, fine-sounding piece like the NAD or Cambridge to a tube amp.
I agree with Bob, again. Another example would be a new NHT M-00 and a S-20 and NHT PVC for $900 and then add a CD player - surely your friend has a CD player already? If not there are many decent CD players that you could pick up used or on sale for another $100.

The S-20 features a 200-watt RMS built-in amplifier incorporating low and high-pass filters and a foot-switch for bypass. Its driver is a long-throw treated-paper eight-inch woofer providing output down to 33Hz.

The M-00 has 75 watt built in amp. You would be amazed at what this small setup can do.
Used Arcam Solo Mini ($650), Mission 72M speakers ($200), the balance for speaker cables, stands, Reflect FM antenna and microbrew. Solo Mini sounds noticably better with the hood up. Remove the casing and it's more open sounding. Weird, huh?
Shop carefully on Audiogon for the following:
Magnapan MMG or PSB Alpha B-1 and sub
NAD intergrated or receiver
OPPO or NAD player
You may need to start with inexpensive cables that can be upgraded later.
$1500.00 could get him A LOT more than a grand.

Peachtree Audio decco would be a good choice.

Marantz or Parasound integrated posibly

Totem would be a good choice, definately bookshelf speakers
Lots of good recs here, and the NAD theme is a good one. Buying used on the Gon for $1000, a system that would be amazing for acoustic music and get the midrange right for everything:

Spendor S3/5 ($500)
NAD C325BEE ($275-300)
Oppo 970/980 ($125)
Cables from Markertek (~$50)

Like the front-ported KEFs mentioned above (I had the Q15s in my first 1K system, and they kept me happy for 10 years) the sealed Spendors would give flexible placement options should your friend need to set them up on a shelf or near a wall--often a reality for people getting started in the hobby. Plus, the Spendors are tiny and beautifully made. A set of speaker stands and a cheap sub would be an easy upgrade path down the road.
Right now it's hard for me to imagine that anything at this price will touch the active NHT system identified by Shadorne (and alluded to by Bob). There is, however, an explanation. NHT is "shutting down" next week - not sure exactly what that means - but pledges continued service and support. The current prices appear to be a clearance "give-away", at app. 1/3 of the (very competetive) original prices.

I agree with a Marantz integrated and CDP. Accessories4less.com has refurbished offers. I also agree with PSB but would consider Triangles like the Comete as a great stand mounted speaker that can be found at discount and can be a long term speaker... coherent from top to bottom and not bright.
A little more than a grand. Used Linn Classik K then add a pair of used Linn Katan speakers. Small system, that can be added to, taken on trips, with a big sound stage.
Cambridge and PSB make a good combination. I highly recommend PSB speakers; for an inexpensive system, that is.
My office system is a Music Hall Trio, cd/tuner/pre/amp with pre outs, 2 channel video in/out and more.
A few questions for you. What kind of music does your friend listen to? Just CD's or also vinyl? Does he/she already have another system setup in a larger/different room? Does this person just want to enjoy some tunes, or are they a more discerning listener? Is there a computer in the small room?
Hi Headshrinker2,
my friend likes almost all kind of music and he just want to enjoy it at the end of the day. This will be the only system in the house and he has a computer and some vinyl (for which he already has a phono-pre).

Thank you to everybody for your input, it is very valuable for me... and my friend!!
Listen in my office all day every day:

NAD 1600 monitor pre/tuner $100 on agon
NAD 2400thx monitor pwer amp $150 on agon
B&W CDM monitors $600 on agon
NAD 525bee cd player $200 on agon

Ok, I am $50 over and spent $150 on ic's and spker cable as well, but I love the sound of this basic system. Tonally sweet, full sounding and never fatiguing (wish i could say the same about the work)

Source: Oppo DV-980H -- $169
Amp: Onkyo A-9555 Integrated -- $450 at J&R
Speakers: Athena LS-500 Towers -- $298 at Audio Advisor (closeout)
Interconnect: AQ Blue Racer II -- $69 at Audio Advisor
Speaker Cables: AQ GBC -- $79.95 at HCM Audio. Specify banana plugs for Onkyo
Ascend Acoustics Sierra 1- used from agon

NAD or Cambridge Audio- used

Oppo- used
all good picks...fwiw...i think you should splurge on used spkrs at this level. electronics are not gonna be much different to this friend imo. oppo is a good call as they are universal but you trade off on redbook cds as oppo does not have as good of a built in dac as say the NAD which will make his standard cds sound better perhaps. stick with solid state.
A Decware 84C Tube Integrated Amp with a pair of Parker Signature 95 Speakers 2 ways would get u at or a little above this price range $1,200 or $1,300.00 new or used at the price range.
An iPod with Audioengine 2 or 5s is a wonderfull nearfield stereo.

For a true stereo:

Cambridge Audio 540 v2 integrated amp ($400) with a Sony Playstation 1 CD ($40) and DALI Lektor 1 speakers ($300) with Chord silver cables ($200).

Cambridge offers a great phono stage ($100) that you can link up a Rega P1 tt ($400).
Actually, upon reflection, I think there may be a real alternative to the NHT system - if you prefer planar loudspeakers. The smaller Magnepans sometimes show up on this site used for $350 - $450, depending on vintage, condition, etc. If you can get a cheap cd player and enough power from a receiver or amp on your budget, that could be another way to go. Won't have the dynamics or bandwidth of the NHT, but will have unique charms of its own.

I like an old Dynaco with the Welborne mods...put it with some Sequerra Met VI mark IIs and it is right nice!
Rega amps and Spendors mate well. Don't know if you can get it below $1000 but used shouldn't be too much more.
of couse, i'll always offer the cheap fostenx 167e bookshelf enclosures with a cheaper subwoofer. it is the only cheap system i've had (and currently had), though i did have a pair a bottom of the line magnepans, which i have come to think were not as good, and later an expensive pair of apogee minigrands, which were well much better (at 4k for the pair).

both for electric and acoustic music, i couldn't be happier with the simple rig i now have (well i could be happier but i'd have to be a lot richer ; )

many good choices, that is what is great about the bottom of high end audio
There are many ways to skin the cat.
Here is another alternative:
(I am familiar with the modified drivers and amp but not the enclousures - but I trust the source)

Flatpak - ready to be glued-up kit. Use this source for the Fostex FE126e and this little integrated tube amp with USB DAC and single AUX in.

If you buy the amp used ($350-$450), you might be able to build the speakers with above mentioned drivers for the remaining chunk of your budget.
Since the amp has the USB DAC, your computer can be used as the source.
If that's how it will be configured, get the newer (2009) version with improved USB DAC. You can also try this alternative for cool $398 delivered - ( FYI, I have no experience with this amp)

I hope you enjoy these alternatives