Does this customer of yours already own a PBX? Because you posted here, I'll assume that we are talking about a Legend or Magix. If that's the case, then they already own a PBX that can support both a T1 and 20 users.
What do you suppose they mean by "a cost effective PBX solution"? Owning a PBX that already satisfies their current needs is pretty cost effective...they don't have to buy a new one!
By "telephony", did you mean CTI? In other words, do you need your computer to "know" and control functions of the telephone? If that's a requirement, then I may need to change my answer.
Regarding VoIP: People talk about VoIP a lot, but it isn't the answer for everyone. You can get VoIP for the sake of having a good conversation on the golf course, or subscribe to it for genuine business purposes. VoIP does not equal free phone calls, it's an alternative transport that--because of the flexability of IP--makes sense for certain scenarios.
You know, I have several customers who use a "flex" product from the phone company. Not every carrier sells this, but here is essentially what it does: A single T1 is delivered with both voice and Internet services. Bandwidth is allocated dynamically, with voice getting the priority. So when no voice calls are in place, your Internet speed is 1.536M. When four voice calls are in place (64k x 4), your Internet speed drops to 1.28M. The voice piece usually comes with a bunch of long-distance bundled in...sometimes even a monthly flat rate for all calls. It's a nice solution for the size of office you're talking about. You can even limit the total number of voice calls so that a minimum amount of Internet bandwidth will always be available.
This "flex" technique is obviously different than the channelized T1 products that you are likely more familiar with. I don't know a whole lot about what you're trying to do, but this might be a solution worth looking into.
Tim Alberstein