I posted this exact same topic a few months ago and got a bunch of very good comments --
check it out.
I had a few more requirements though (no Ford/Mercury, four doors, manual, power locks/windows, preferably leather and sunroof) so some of the suggestions there might be limited.
My personal top list included an E46 BMW (still wonder why I didn't get one

), '03+ Mazda6i or 6s, '02+ Hyundai Elantra GT (hatchback), '02+ Nissan Altima.
In the end, I purchased a loaded 2000 Nissan Maxima SE for 10,500. Your friend could probably get an '02 or '03 for his price range; they have much more powerful engines and come with HIDs stock. The car has a few caveats: horrid turning radius, not quite as fun in the twisties, play in the shifter (not unlike Contours, I hear; never drove an MTX Contour myself); lots of free play in clutch, and an occasional TPS issue (fix available from dealer; I haven't gotten it done).
However it is a quiet, smooth ride, the engine is very torquey, the build quality is insanely great, lots of electronic trinkets I can no longer live without (Homelink, one-touch sunroof open/close, one-touch driver's window close, low windshield-washer fluid light that's come on twice so far

; auto-on headlamps, etc.) and it's gorgeous to boot. They have a decently large aftermarket too, since you said your friend is into that sort of thing. In the end I don't at all regret the purchase. Check out my sig for pics and the full list of features on my own.