What kind of sound is he looking for? Is this strictly a stereo setup or would he like to incorporate it into a home theater setup as well? Is DIY an option for cables?
I know the Sony 3000ES is a popular choice around here but if your friend is looking for a setup with a bit more warmth a Jolida integrated hybrid amp would be a nice choice. The 1501a the preamplifier is tube based using a pair of 12ax7 tubes and the amp section is solid state with 100 wpc. I'm not sure what the going rate is on the 1501a but one sold for $425 recently on audiogon, so I'd assume that is approximately the used going rate. I'll also throw out a recommendation for the YS-Symphonies preamplifier, it's a great sounding preamp for the money, combine it with a B&K ST-140 and you'll have a nice combo for about $600.
For the source the Toshiba 4960 or the Pioneer DV-563a would be a good option for an affordable source. There are a number of aftermarket modifications for both if your buddy wants to upgrade later.
For the cables some sort of DIY is probably the best bang for the buck. I love my Chris Ven Haus recipe for DIY cat-5 cables, but they're a ton of work so that might not be of interest. Check out
http://www.geocities.com/jonrisch/cables.htm , lots of great info here.
I don't have any real input on the speakers other than I really like my Magnepan MMGs but I'm sure for $1200 you can find something "better." For $2000 your friend should be able to put together a very nice setup.