I'd say paint the cabinets. Once all those little glasses are off the hood and the counters are cleared and those plates, etc are off the walls, it will help too.

Post pics of your inspirations.

First take away all the clutter. Your $1000 won't be enough for appliances or a new hood. So concentrate on painting the cabinets white. Freshen up the walls too with some paint. Update the hardware to a nickel or silvery colored modern pulls. Get a set of new stools that don't have backs. You might need to shop at target for the stools, they have nice ones that can look great and are affordable.
In the dining area replace the fan with a chandelier or simple large drum shade.
If you have extra money left over, put in a simple subway tile backsplash behind the sink area. Remove the plate rail over the sink.
Good luck!
If you do all the work yourself I think your budget can stretch that far.

Silvery metals are on the way out. Other metals are on their way in, bronze, copper, even brass will make a comeback. White appliances are coming back.

Declutter and keep on saving your money.

If the cabinets are in good shape and you plan on keeping them, paint them and put in a inexpensive but updated laminate counter top. Change the hardware on the cabinets. Then save for a better countertop, appliances, lighting, and less bulky hood.

I actually like the cabinet wood colour - with a $1000 you can change the hardware and paint a little but that is about it.
The counter tops I find particulary unattractive with the oak - I don't know whether you can have them refinished (and the backsplash)
Remove the tacky railing on the range hood (and the one over the sink)
It looks as if the island is NOT the same wood as the cabinets ~ I'm not sure what I would do with it; it will need a kick proof finish
The light oak chairs either need a stain to match the cupboards or to be replaced with less somber bar stools

Tara, I'm assuming all the nick nacky things and the stools, etc are NOT yours, right? They belong to the current resident and you haven't moved in yet, right?

Yes, nothing in the picture belongs to me; that's all the current resident. WOW, everyone, thank you for all your suggestions! This is my first post here, and it's really fun to see everyone's ideas popping up! I really appreciate the input, and welcome more!

Kate, this is REALLY great advice. We're still undecided as to whether to paint the cabinets; I just am not crazy about the color of the wood, but maybe a good cleaning will change my mind once we get into the house. Here's someone who painted her 80s cabinets that I'm thinking I might try to emulate:

As suggested above, clean and clean and clean some more. The typical kitchen of that age will have so much built up grime on the cabinets that it will shock you. It is very possible that in cleaning you might remove some of the old finish, so know ahead of time that you'll have to do some finish touch up or painting. You might want to take all the hardware off so you can soak it clean; you might want to spray paint it while you have it off.

Come up with your color palette early so you don't start buying and then realize something doesn't go with something else like you'd hoped. Paint will be your friend on such a small budget. You can also consider some of the Rustoleum cabinet and countertop refinishing kits.

As you consider what to do with the hood, check your local building code requirements. With a gas cooktop there are usually specific dimension requirements and you can't just remove the hood and replace it just based on what looks good.

I honestly am not a fan of painted cabinets. There, I said it. I have never had them in my kitchen, but I have them in my bathrooms and they always look dinged and scratched and dirty. Plus the doors have grooves that dust and dirt collects in and I'm always wiping them down. I can't wait until the painted cabinet trend passes, or at least the white painted cabinets, but it has been at least a trend for a long time so there is somewhat of a timeless quality to them.

In the case of your kitchen....I'm not a big fan of wood floors in cabinets that have a lot of grain. In the pictures, your cabinets don't look to grainy though. If they do look grainy in person you could think about a darker stain. The house I just purchased actually has a stained cabinet that looks so dark I actually had to ask the builder if they were painted or stained, you can just barely see the grain though, which is nice, and it looks okay with the wood floors (I'm actually not a big fan of wood floors in a kitchen, but that's a whole different story). A dark stain on yours would be okay. What I really don't like about the painting idea is that for your budget you are not going to be able to replace your countertops. And if you paint the cabinets and get them all lovely white, I really think those counters are going to stick out like sore thumbs. I attached a couple before and afters of my 60s kitchen, it was a bit more than a $1000 budget, but we moved walls and got new counters, move appliances, added some more cabinets and a whole lot more, but it was 14k and might give you inspiration on saving your cabinets.

Declutter. Clean and clean again. Then maybe paint the walls a color that compliments the wood. Then relax and think about the next step. Don't paint the cabinets, but spend your money on interesting stools and paint for the counter top.

Painting the vent hood a light color to match the wall and ceiling would help it disappear. It would also give you a taste of the work involved in painting the cabinets to help you decide if it is worth doing. I would get bright painted stools for contrast. Create a command center message board/calendar for the wall above bar using bright color from stools. (red, turquoise, apple green or yellow?) Use this accent color in linens and accessories.

I painted my cabinets 5 years ago a mocha color. It was a lot of work, but very inexpensive for a big impact. I removed the doors, hardware, cleaned with tsp, sanded, primed and painted 3 coats. I used Benjamin more paint that is designed for cabinetry. The primer was tinted too. It held up very well.
I'm not sure if I would do mocha again, I keep seeing cabinets painted in gray or whites.

If you're in the area and would like to learn about budgeting kitchen, come join us for breakfast and our free kitchen class every first Saturday of the month: http://leichtwestchester.com/how-much-will-your-kitchen-cost-class-registration

You can ask the professionals for ideas regarding the floor plans too.
Best of luck! Feel free to write us if you have any questions.

People are saying to paint Oak Cabinets white??? I don't get why people paint nice wood. There is nothing better then stained wood imo. Why not sand it and stain it don't ruin it with white paint that just looks tacky imo

Remove all clutter. Replace the hood, and the stools and paint the cabinets gray, if you can afford countertops soon, if not paint them white.

We had a similar kitchen and the cabinets are Blackwood so we left them as is and put black granite tops on,added a glass splash back and the difference is amazing! We also left the copper range hood,took the frilly bit off the bottom and it now looks like a statement piece.Your cabinets look good,don't rush into painting them,I agree that can look tacky if not done properly... Embrace the things that are good quality,replace the rest!

Not the best photo but you get the idea

I actually think it's the countertops cheapening the look. I'd consider spending my entire budget on cleaning the cabinets and replacing the island countertop. If you get local granite it can be extremely reasonable....