Hello Glenn1000:
I see you are direct and straight to the point when it comes to decribing what your friend wants or needs in an "audio/video" system. And designing one for about $3K is going to be challenging. I should know. I have designed a system myself that falls right into that price range (although, it's not finished yet. All I need right now is a speaker system.... but so far, my system costs about $3,500.00 (but adding a $1,000.00 speaker system, a power conditioner and a cabinet that will be strong enough to support a 100 pound TV and maybe, 200 pounds worth of components will push the price tag of my system to WELL over $5K)) (go to "Virtual Systems" and see my home theater system called "A Home Theater System Slowly Coming Together" to get some sort of idea of what I am talking about). But in designing your friend's audio/video system, I am going to assume that your friend already has a TV, right?? Because if not, then I am going to include one in my recommendations anyway.
Now that the formalities are over and done with, let's get down to designing an audio/video system that you or your friend isn't going to sneeze at. Okay?? Okay..
First, I am going to start out with the TV just in case your friend doesn't have one yet. With the prices of HDTV going down (while the picture quality of these sets either stay the same, or improve over their predecessors thanks to improving technology. I am going to find out things for myself this coming weekend. A television station in my hometown is going to be hosting something that is called a "Digital Expo". And there, there going to have EVERYTHING there that pretains to the "digital age". And that will include computers, PDA's, anything that pretains to the internet, and of course they will have some things that pretain to digital audio, DVD and yes, HDTV. So you'll have some idea as to where I'll be spending my time this weekend), now maybe a great time to think about investing in a HDTV. And as far as HDTV sets are concerned, now I believe you can get one for about $1,000.00 or so. The set I am talking about is made by a manufacturer named "Samsung" The model number of this is "TSL2795HF". And as you can imagine, this is a 27-Inch set (just like my Panasonic CT-27SF37, only my Panasonic is an "analog/interlaced" set) that happens to be a HDTV. This set has all of the goodies including two tuner PIP, Zoom Capability, rear and side mounted A/V jacks with one S-Video Jack on the rear and another one still concealed on the left side of the set (my Panasonic doesn't EVEN have any front jacks AT ALL), component video input jacks, a 3D Y/C digital comb filter and here's the good part: it has a "progressive scan decoder BUILT-IN (!!!!!!). Taken altogether, this set produces one of the sharpest, truest, and most beautiful and intense pictures I have ever seen. I believe the picture from this set is a LOT BETTER than the picture MY set produces. And to believe that this set is ONLY $1,000.00!!!! Too bad I am not in the market for a television right now. Because if I was, and if I would've waited a little while longer, then this would be the set I'll be getting. If you're not put off by the "Samsung" (and they make some decent products now. They don't make any cheap and inferior products. Nope, not anymore) name, this is one set that is worth checking out right now.
Next up, DVD Players. Due to the fact that the Samsung set that I have just mentioned has a "progressive scan" decoder built in, I'll would save some money in this area and get me a DVD Player that DOESN'T have "progressive scan" capability (just use the component video outputs of the DVD Player and connect them to the component video inputs of the Samsung HDTV, and the Samsung will upconvert the otherwise interlaced signal coming from the DVD Player's component video outputs and turn it into a "progressive scan" signal). And the DVD Player I would look at would be the Sony DVP-S7700. I know that this player is discontinued now, and Sony NO LONGER manufactures this player. But this is still one of the best DVD machines available today (if you have an interlaced TV that is). It is built like a tank. And best of all, it has an excellent transport with very good DACs. So, it can function as a CD Player too. And best of all, you should be able to get one for a fantastic deal. Being that this player is now discontinued, you should be able to land one for about $500.00 brand new if you surf the "net" a little bit, and maybe, about $350.00 to $450.00 for a used one. This is one player that is STILL worth checking out, and it would be a wonderful mate for the Samsung TV I just talked about earlier.
Next up, the audio electronics. I see in your heading that you have mentioned the possibility of getting a separate surround sound processor and an multi-channel amp. Now, if you were spending about $15K and up, then I would see that as a possibility. But now, for just about $3K for a whole system, I think it looks like a receiver is going to be your one and only option here. And for the price range of about $500.00 to about $1,000.00 (depending on features, connectivity, surround capabilities, and yes....... power), you should be able to land a decent receiver (it may not be a "top-of-the-line" model, but it won't be an "entry-level" model either). Others here have mentioned receivers from the likes of Denon, NAD, Outlaw, and Yamaha. How about if I could throw Harman/Kardon into the mix. And the reason I say Harman/Kardon is because with the speakers I am going to mention in a minute, I believe you are going to find the warmer and smoother sound of the Harman/Kardon a little easier for your ears to take. And don't let the lower power ratings of their receivers mislead you either. Although Harman/Kardons tend to be rated rather low in the power department, they have been known to be high current/wideband designs, so Harman/Kardons tend to sound a lot more powerful than they appear to be. I have the AVR-210 right now. And although, it is rated at 40 W/P/C x 5, it's more than strong enough for my 12 x 10 x 16 bedroom. Most of the time, when I am listening to movie soundtracks through my Sennheiser HD-580 Headphones, I cannot turn the volume up no more than two thirds of the way on the left side of the volume control. I cannot even imagine thinking how loud this thing will go once I finally hook some speakers up to it. So, that's just one more brand for you to consider.
Next up, speakers. Since your friend is into "rock and techno" music, I will have to concur with what the others have said beforehand and advise you to take a hard look at the Klipsch speaker system. The one I have in mind includes two pairs of satellites, a center channel and a subwoofer. The setup I have in mind also retails for $1,000.00. They provide a pretty hard punch that belies speakers of their size. They are also small, so they won't take up much space, and they are pretty efficient too. And since they won't need a boat load of power, they'll be a perfect fit for the H/K receiver I have just mentioned earlier.
And finally, accessories. I would say this. Get all the necessities in hand first. Don't skimp on your components. If that means if your friend has to take some shortcuts in the "accessories" right now, then so be it. At least, he/she won't be sorry if they don't end up selecting components that they'll be trading up later on just because they want to save money right now. I would rather spend the money of the components right now, and then get the accessories later on when your budget recovers and your financial situation become feasible for doing so.
Let us know what you and your friend decides on later on.
Good Luck
--Charles--