These have been very highly reviewed - the Home Theater Direct Level THREE "Combo Y" 5.1 Set- Dark Cherry Veneer - http://www.htdaudio.com/levthre51set.html
- for $1049. Spend about $700 or so on a receiver, Denon 3803 from 6th Ave (call for best price) should be right around $700. For a remote, depending on how technical he is nose around at remotecentral.com - I've got the Radio Shack 15-1994 and program it via the "JP1" interface from my PC. For $35 it was a steal even including the $20 for the JP1 cable. If he is technologically challenged or has kids / wife who don't want to screw around go on ebay and find a Pronto for $150 or so or a home theater master MX-500.
Alternatively you could also go with the Ascend Acoustics - http://www.ascendacoustics.com/Main/HT/builder.asp
- which have also been very highly reviewed. Using their "builder" and throwing in an HSU VTF sub it woulld end up being $1200 shipped for 5.1 or $1400 for 7.1. Another option for sub (which I would personally recommend) is going with an SVS 25-31 sub for about $550 and the Ascend package above would go up about $50 by substituting the SVS for the HSU.
Yet a third option would be find a sale (or go internet but risk no warranty) for an all Polk setup, find some mains he likes and then go CSi30 or CSi40 for center and RTi28 for surrounds. Also then the SVS or HSU sub.
For DVD player, any decent progressive scan player would be fine. I wouldn't spend more than $250 on that. I've got a panny RP-82 which are impossible to find now but there has to be a replacement out there for it by now. Try to find a player with the Genesis FL2300 chip in it. OK after more research seems that there is little news in the $200 dvd player area. For two decent players that got well reviewed but have the Chroma bug try ecost - http://www.ecost.com/ecost/shop/detail.asp?dpno=144989
- you can get the Denon DVD-900 for $115 shipped (refurb) or the Toshiba SD4800 for about $160. I used to have the Toshiba SD4700 and loved it - other than the Chroma "bug" which for me wasn't that noticable. The denon mentioned above uses the same Genesis deinterlacer chip as the Panny RP-82 which was so highly touted.
I'll also second the Accessories for less option above. Great prices on receivers, all marantz, all refurbed but full warranty.