Can you explain this basic circuit to me? Why is the transistor switch off?
Maybe it helps if I re-draw the circuit and annotate some values of voltages and currents.
The circuit on the left is the situation when the switch is open and the LED is on.
The circuit on the right is the situation when the switch is closed and the LED is off.



simulate this circuit &ndash; Schematic created using CircuitLab
Note how adding R5, the 1 k resistor, makes the voltage at the base of Q2 drop so low that there's only 0.8 V left for both the Base-Emitter of Q2 + LED D2. That 0.8 V would be enough for only the NPN (an NPN needs about \$V_{BE}\$ = 0.6 V to do anything but there's also the LED D2. A LED needs (depending on the type) at least about 2 V do start conducting. So that 0.8 V is not going to make any current flow into the base of Q2. So Q2 stays off and so does the LED.