An Onkyo Ipod dock ($100), and he will have better sound than a budged cd player as long as he uses Apple lossless file system. Then the new Outlaw two channel receiver ($600) that just got a rave review in Stererophile, and has an USB input so your son could stream music straight from his computer. An then look for used NHT SB-3 ($350), and I think you got a system that a teen would be proud to crank up and show off to his friends... but would also sound great.
Good luck,
Good luck,