After a lot of looking at different amps I decided on a Blackstar HT-5 head with separate cabinets.

http://www.blackstaramps.co.uk/products/ht-5/ht-5rh.php

http://www.amazon.com/Blackstar-HT-5-HT-5H-Guitar-Black/dp/B001P3UPOC

I got it from Musicians Friend as a customer return for 235.00. Its 5 watts with a nice clean channel and an absolutely killer gain channel....

I decided to go with separate cabinets so I went with a Lopoline 1x12 TV style cabinet.

http://www.lopoline.com/catalog/item/5402536/5358316.htm

I ended up getting 2 of them and the HT-5 fits perfectly on top... so it looks like a little mini stack.

Speakers definitely make a difference. Think about when one goes and buys a stereo system for the house and they spend so much time trying to decide on a pair of speakers... why would an amp or cabinet be any different... I ended up getting an Eminence Cannabis Rex and a Celestion Blue...

These sites give a good description as to the sound of each...

http://www.eminence.com/guitar-bass/patriot-series/?size=12#speakers
http://www.eminence.com/guitar-bass/redcoat-series/?size=12#speakers
http://professional.celestion.com/guitar/products/alnico/detail.asp?ID=3

If you are set on the traditional Fender tone then you might want a Jensen..

http://www.jensentone.com/alnico_index2.php

.. although I have read some forums where the Eminence and others work well....

http://billmaudio.com/wp/?page_id=295

http://billmaudio.com/wp/?page_id=709