best sub $1000 receiver for music?

Check out an Arcam AVR200...slightly over a grand....a used unit is much less. Excellent two channel sound and full home theatre capabilities.

I do believe there is a considerable difference between receiver and integrated amp when it comes to sound quality. My friend has a 1000 dollar Yamaha receiver that he bought about 3 years ago and I can honestly say that its sound is not nearly as good as a budget integrated amp such as a Nad C320BEE. Most receivers have the typical glare and grain that is known of solid state.

If you still insist on buying a receiver, I would recommend either a used Arcam AVR100 or AVR200. Both are well below 1000 in the used market. If you like the sound a bit on the warm side, a Nad T762 would do. I believe the T762 is TAS receiver of choice in its price range and it is one of Nad newer model. You can get a new one for about a grand.

Does it have to be multichannel or is two channel sufficient?

Even if you have to save a bit more to buy new, the Arcam should be your choice.

The Rotel 1050 is a very, very nice receiver at $800 list. 100 watts per channel, wonderful sound and a lot of well-thought-out functionality. I use one as you're describing it, 98% for music and as a movie system every week or two. There's an Audiophilia review here: http://www.audiophilia.com/hardware/rotel.htm and specs here: http://www.rotel.com/products/specs/rx1050.htm

Having said that, the quality of FM programming here is so poor that if I had to do it again I'd probably buy a better quality integrated amp and add a Kloss table-top radio for listening to NPR. I got a great price on a used 1050 and am very happy with it but I use the FM so little I've even considered selling it and getting the little Rotel RX-02 integrated.