I was thinking Outlaw receiver and Elac speakers Thoughts?
My thoughts are that's not the way to go about it. Oh yeah a receiver seems like the answer. But you just shot your friend in the foot. No such thing as a receiver that sounds good. Does not exist. Pure crap.
Regardless of budget its all the same. First you need to ask your friend about his expectations. His REALISTIC expectations. Impress upon him the REALITY that he can have quality OR quantity but not both. If he wants 7.1 surround with video and a player and turntable and tuner he can have all that. It will suck. He won't want to listen to it. But he can have it. No problem.
If he wants music though then he needs to be realistic and keep it simple. Either analog or digital but not both.
My opinion, if he balks and you are a true friend you will walk. Let him know you are ready to help when he's ready for high end audio. Which does not mean expensive. It just means the priority is music not gear.
Then if he wants music you explain everything matters and no one single part is any more important than any of the others. So you break it down. What he absolutely needs:
Source, amp, speakers, interconnect, speaker cables, power cords, cones. Absolute minimum. At this low budget level we can lump interconnect, speaker cables, power cords and cones into one category. Call it Source, Amp, Speakers, Accessories. Four items. $500 each.
You can get a pretty decent integrated for $500. Ditto speakers. Never worth spending more than that on CD anyway. Could probably just stream and skip it altogether. BDR Cones, $120 for 2 sets of 3 for the speakers, leaves $380 for wire. Should be able to find decent Synergistic Research used, roughly $120 or so each no problem.
And there you go.
Just remember, you leave out the wire, the cones, and the integrated, you might as well just turn him loose at Best Buy.