Check out some of the photos I've posted here:
http://spaforums.com/Spa_Hot_Tub_ptopic868.html
I've redone tons of these Leisure Bay Spas in the Atlanta area and the type you describe is no exception. When replacing a system such as yours, I always order the control with a 4kw heater (longer heater life and easier on the system) element.
Taking a system that designed for 2" and knocking it down to 1" or 3/4" hose fittings is an easy thing to do. Home Depot's got everything you need... it's where I go to get what I need.
I highly recommend this system for dual pump spa intallations:
STD 2000 or this one for single pump/blower installations,
STD 1000.
Any questions about this, just email me directly or call our office and punch up extension 105. Leave me a msg and # if I don't answer. I'll return your call, usually in the evening.
Thanks.