What I suggest to my friends if their budget is 1k, is either a package from Ascend Acoustics (tailor it to your desires), or the ELTs from either ACI or AV123.
With any 5.1 system, you'll want the most "bang" for your buck. And nothing says bang like a killer subwoofer.
So we'll start your killer, yet budget, system with an SVS 25-31PCi subwoofer.
Then you'll need the five main speakers. I'm going to assume you're aiming more towards movies than music, so we'll get some difuse surrounds instead of direct radiating (the standard pick for all-music systems).
Fluance will be hard to beat for the price. Most people would be reasonably happy with HTiB speakers and a great sub. My list has an amazing sub, and speakers that will beat any know HTiB (except maybe Boston Acoustics $4000 HTiB) speakers hands-down.
AV-BP2 bi-polar surrounds, and an AV-SC center will do you right, then we'll top it off with a pair of SV-6 bookshelves. Since you have the sub already you won't need tower speakers.
quick price check:
549 for the sub 70 for the center channel 100 for the surrounds and 120 for the main L/R
thats a total of $839. That leaves you $161 dollars to buy DVDs with.
There are two set-ups that may suit your needs and they are very affordable. I have to add that I have never heard either of these before. But if you add a quality sub you should have a very good system.
I'm for the rocket package (AV123.com), myself. Never heard of Fosgates for HT (doubt that many people have). First thing about speakers is that you HAVE TO hear it for yourself to determine if it's right for you.
Also check out HTD.com Ascendacoustics.com and axiom.com (I think).
I have the BIC Acoustech 5.1 speaker system and love them. I don't think that better speakers can be bought for less than $1000 dollars. They are horn speakers and the reviews I have seen indicate they are better than Klipsch Reference Series speakers. For more info on these speakers, look here (can't post links yet) www(dot)hometheaterspot(dot)com/htsthreads/showflat.php?Cat=&Number=643919
For the ultimate under $1000 system, do what I am doing and sell the sub that comes with this system (it was designed by Dr. Hsu) for ~$200 and then you would have enough money left over to get an SVS sub.
I like all the rec's I've read so far as much as the ones I made, and looking at them I was struck with the following general notes to add.
For a 1k budget, be sure to get at least bookshelf sized speakers, rather than just mini satellites. That will get the bottom end of freq response down to around 80 hz and increase the clarity and SPL levels from all the speakers.
If you do that, you'll end up with one of the lower-end subwoofers. You will like the effects you get, but you also have a nice upgrade path to good mid-priced subs if you want to spend more later - and as it's been implied in all our responses, you'll be very impressed with that move as well.