The budget is fairly tight for a large space and receiver included. Given your buddy's preferences, I'm thinking of a system like the following:HSU Research VTF-1 MK2
($494 shipped) - Possibly not enough sub for the space, but since music is the priority, at least it allows you to manually adjust the trade-offs being made between bass extension and output, as well as the tightness of the bass. With this budget, you can't have everything at the same time.Ascend Acoustics CBM-170 SE
x 3 ($556 shipped) - I use three of these across the front in my own home theater, and I love how they sound, both for movies and music. I have a large open space as well, and they can handle it. Ask for a vertically-oriented center if you can accommodate that because it works better (in general--not just for this speaker specifically), otherwise it can be used on its side as well.Denon AVR-1612
($170 + whatever shipping costs) - This is about as much receiver as you're going to get without compromising even more on the speakers and sub, and it seems alright to me. It decodes everything, passes 3D, and even has Audyssey MultEQ--not bad for probably about $200 shipped.
That brings the total to right around $1250. The main limitation is that the sub is hardly going to pressurize a large space, but it's a quality sub, and it can get louder if you choose to trade off some bass extension.