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Perfectly possible to get a decent system for £1000. This kind of money will buy a top of the range all-in-one (home cinema in a box) system, or a good entry level separates system (£500 speakers, £350 amp, £150 DVD).
If you go for an all in one, make sure you get one with a few spare inputs - some of the current models can't take a digital audio signal from a sky box, Freeview, etc.
Find yourself a good AV/hifi shop, and have a listen to a few systems.
Not sure about DAB, as it doesn't really work where I live. I listen to radio via my Freeview box or sky.
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Panasonic TH-46PZ81B, Arcam AVR350, Linn LK100, Naim NAP110, Quad L-ites, PS3, Samsung 850, Sky+, Humax 9200T, Panasonic E50, Harmony 885, Pixel Magic HD-MB200, M-Audio Flying Cow DAC, Pronto TSU9600, Mac Mini, iMac Aluminium
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