I would suspect that if your friend was left to himself he would end up purchasing a Bose Wave® music system with connect kit for iPod that retails for $599.
I'd suggest giving him some options to choose from that would be as close to this product as possible along with some higher quality options. Here are three suggestions for "similar" products:
(1) Peachtree Audio MusicBox DS4.5 System that retails for $799. The price is very similar, but doesn't include a CD player. The speaker can easily be place next to the main unit to minimize space constraints.
(2) Bowers & Wilkens Zeppelin that retails for $599. Same price.
(3) Bowers & Wilkens Zeppelin Mini that retails for $299. He'll never expect an option of a better sounding product that actually costs less.
He may have plenty of money, but that doesn't mean he want's to spend it on audio. It's likely that the budget he gave you was that he assumed that you couldn't help him for less.
My brother-in-law thinks of dining out as a hobby in much the same way that audiophiles think about their systems. He took the family to dinner one night where the cost was probably over $1,000 for a table of six. It was crazy to me, but for him it was well worth it to share the expereice of true 5 star dining.