The estimate sounds high--and never go with just one estimate. Especially if you don't really understand the work that needs to be done. And, it's been said, but it's important to get, and CHECK, references!

Before you go ahead, you should do some internet research, so that you understand what has to be done and how it's done. You should understand the step by step process, not necessarily to do it yourself , but so you know what should be done, and so you can tell if it *is* being done.

As to costs--there is a handy book called "Means Residential Remodelling Costs/Contractor's Pricing Guide 2008" that you can buy either at Home Depot or on-line--it is a bit steep, but it gives you details on the costs--contractors use it, insurance adjusters use it--you should too-

A last thought is, find out who, exactly, will be doing the work--"contractor" means " a person who contracts", and you need to know who he is going to get to do the work--

I actually think it's a good idea to go to Home Depot or Lowe's, because the contractors try hard to keep them happy because they want to get more work from them, and HD and Lowe's set the prices.