Just catching up on this thread and found it is similar to a project I am just thinking about. I too want to be able to control 1000+ LEDs. The project goal is to control a high number of single color LEDs, such as blue, to mimic rain drops falling down a window pane.
I am still new to ICs (and not strong in electronics) yet am not afraid to get my feet wet with them or programming. I have been doing a lot with TLC5940NT (Datasheet:
http://focus.ti.com/lit/ds/symlink/tlc5940.pdf) along with an Arduino. Great driver overall, yet only 16 Channels. I can daisy chain them and address a large number, yet it's not clear to me if there is a limit to the number of TLC5940NTs I can chain. Also I don't think they are too beneficial for multiplexing.
Pros and Cons to trying to use them to reach 1000+, would need 63 of them and that's a lot of wiring.
I wanted to see if you found any other ICs in the last 2 years that might have worked better or you might suggest now.