Tom, this is a tough one. I like the suggestion of a 2.1 system, especially if this is something your brother-in-law wants to expand on. How serious is he about audio/video stuff? If it's a growing passion, then, yes, building piecemeal is the way to go.
How big is the space for the HT? If it's small, maybe the HTIB thing is the way to go. I know that's blasphemy, but the big draw of small speakers is a powerful one. However, if your bro-in-law is willing to plunk down $1000 bucks for a system it sounds like he's ready for something serious.
