T.H.
J.-
I have no specific ideas for you - you know what your family values most, and what might remind you most of him.
When I was a teenager, my grandmother gave me/my parents some money for me to get a "nice" winter coat and a watch that I could "keep" as "rememberences" of her. Well, the coat I wore and outgrew, and the watch was a cheaper one whose band broke and I got rid of long ago.
So all I might suggest, if I may, is perhaps you might want to wait before spending the money. Don't feel like you need to spend it in the month you receive it. My husband has $200 from his grandfather who died maybe 4 years ago - he still doesn't know what to spend it on.
The other thing to think of is - is this item mostly for your husband, or is it going to be passed down for your kids to remember FIL too? What is your intention? If only for your husband - he should decide. But if for your kids - right now you have a girl, would she want a man's watch? Will you have a boy in the future? Is there something non- technology related, non-clothing/fashion related that you can buy (that maybe won't go out of fashion for your kids)?
Something your family might already have but would be great - you could have one of those professionally bound books made with pics of FIL. Or you could have a video made of your family history/FIL's life. It wouldn't take all the $1000, I don't think. But if you don't already have something like that... I think the stories about a person are the most telling about who they were, much more so a few generations out than a watch.
Okay! Good luck!
T.