I think it is very sweet of you to do this for him. $1000 sounds reasonable - depending on the size. I recently met a woman at my LQS who was making needle-turned Hawaiian applique blocks for a king size quilt, she's been working on it for 2 years. It's an amazing amount of work. I'm also a little confused about the pricing - you said he'd pay for the fabric but you'd be doing all the applique and quilting, then you said $1000 plus quilting and binding. So the cost would actually be more?