Best $500 System?

$500 is a pretty low budget for a system. If I needed a system at that budget, and didn't need deep bass, I would probably buy a pair of new JBL LSR305 powered monitors and I'd spend the remainder on the best used Oppo DVD player I could find within the budget. The Oppo DVD players have remote controlled variable volume, so you would have all of the components required for a complete remote controlled CD playback system. You will need to budget a small amount of money for interconnect cables. The JBLs do not have RCA connections, so you'll need an adapter or a RCA to XLR or TSR cables.

A Linn Classik with a pair of SB 1 Klipsch speakers. You can always add an amp or a couple of subs later. AM, FM. CD. and you can run an I pod throught it, and xm radio. All future add ons. Make sure to get one with a remote so you can use the alarm, the clock, and the sleep timer since they can't be set manually. If you or she gets the Classik, (I just sold mine last week) I'll donate a pair of mint Klipsch SB 1 speakers if you pay the shipping. They sound really good with the Linn 92dB.

Thank you all for you good ideas - I know that the budget is very low, but feel we can do better than a boom box. I checked out the Classik and it looks like a good option if I can find used and a very generous offer on the speakers, polk432 - thank you that touch my heart. 
Reubent, I checked out the JBL's and you also gave me the thought that she may already have a DVD player that we could come off of - will check this out.

gammajo,

I would caution you that most DVD players do not have remote controllable variable volume. If you use a DVD player, or cd player, that do not have remote controllable variable volume, you will have to set the volume using the gain control knob on each of the individual active speakers. The beauty of the Oppos is that they do have remote controllable variable volume. 

Good luck in whatever your friend chooses.........

Yes I have an Oppo 105 and understand. I found an old Blue Ray Player that I am not using (replaced it with the Oppo) hooked it up to my computer speakers which have a volume control, control both left right - and it plays fine except that the speakers are of poor quality - now just need to find some good self powered speakers