$1000 for a folder is a nice budget. If you don't mind used, CL is your friend. I've picked up Brommies, Dahons, Bike Fridays and the like there.
I can understand the reluctance to use small wheels, but it's really hard to design a compact folder around, say, 26" wheels. So I think you're right to stick with 20" wheels to start.
Go out and ride as many folders as you can, because they tend to be idiosyncratic with regard to design, features, fold time, etc. Ex: I once bought a Giant Halfway used, but sold it because the saddle position was too far over the rear wheel - I kept doing unintentional wheelies, no joke. Not what I wanted a folder for!