You're probably looking at recircuiting the loads that they want on the generator to a separate panel. That way you can use an ATS sized to the generator. If they want the whole place on the generator (even if they turn most everything else off) you will need to install a 400A ATS.
If the former, I'd figure it as a new service panel, generator and the smaller ATS.
If the latter, I'd add in a 400 A ATS with the generator and plan on spending a lot of time explaing how much of their new house will and won't be able to powered during an outage.
As to the LED downlights, I've only used the Juno product, but I think that they're all still working the bugs out of the technology...otherwise all of the major manufacturers would be offering them. If you get an off-brand, be sure to check out the UL Listing in case the AHJ wants to hold your feet to the fire on it.
