building the best system I can?

i agree with the integrated amp route--a couple that i'm enamored of are the hk990 (which i've seen packaged with the matching cdp for <2k) and the vincent 236 (which you can find used with a matching cdp for <2k). the hk has the advantage of inboard dacs, bass management, etc. as for speakers, since your friend already has the studio 20s, i'd start with 'em, add a sub and see how it sounds. paradigm's studio sub 12 would be a logical match--i see 'em used for around a grand, though you get a vg rel or hsu for less. for a music server, i defer to others--i have a $250 squeezebox touch which which works just fine, although depending on your friend's needs there's a number (e.g. olive) which have integrated cd players, internal storage, etc. budget a few bucks for cables and wires and you'll still have some $$ left over for upgrades, room treatments, etc.

It's interesting how many of you suggest integrated over seperates.

what if I used a mccormack dna-1 or 0.5 as main amp? Any suggestions on a pre amp? I have some money to spend so lets see what we can come up with. Thanks

Can't speak for anyone else, but I suggested Integrated since I thought your $5K was including a digital source. If I understand correctly, you are looking for an amp and preamp.
A McCormack amp would be an excellent choice. Then I would pair it with a tube preamp that has a low output impedance such as a Rogue. You would have power and bass slam with warm, lush sonics.

"Speakers sound like the amp running them,..."?