I need your advice on system for a non-audiophile

While I am sure this type of thread may have been posted before, I'd really like your input on this. At the risk of sounding like an out of touch audiophile, I simply have been away from the lower end market (e.g., the Best Buy scene for audio) for so long that I really don't know if I can be of help to a work colleague who asked for my help in buying a new "stereo."

My colleague told me she has a "crappy Sony system" that really doesn't sound that good and would like my suggestion for buying something new. I suspect its an older cheap rack-type all Sony system. She tells me it has "5 tiny little speakers."

I asked her to tell what three things are most important to her in this new system and here is her reply:

1. Sound quality that is clear

2. Not small system, but not too large. My house is really small so I don't' want a system that takes up all of my free space (she has seen my 300 pound Rockports and triple wide loaded SRA rack so she may be thinking about that when she worries about a system taking up all of her "free space.")

3. Price, between $700 - $1,000 if possible.

Any suggestions? Thanks