John,
Sounds like you've got a pretty decent start so far on your homework for the system. I will try to answer all of your questions, and there are other professionals here that will throw in some advice as well.
First of all, if the $650.00 includes the tap, and running the line outside, and installing the backflow, and includes materials, then yes, I would say that is a good price. You say you don't have anything to compare it to though, I think it is always a good idea that homeowners get at least three quotes on everything they do. Not only to compare prices, but also to get a feel for other contractors, there may be one out there that you feel is more professional, and that you trust more. Just a suggestion.
Good choice in going with the 16 station controller, I wouldn't suggest two controllers, and I am not sure why they did, that is just a problem waiting to happen.
Not having automatic drains is fine, you don't need them, and really, by draining your lines after each use, you are just wasting water by having to re-fill your lines at each use.
I would have a tee installed so that in the event of a freeze, if it happens, you have a way to blow out your system. It is cheaper to have it installed now, then when it is 20 degrees outside, and at the last minute.
For the amount of PSI and gallons per minute, I wouldn't be using 3/4" pipe just to save money, the friction is going to reduce PSI, and compromise the operation of your system. I would use a minimum of 1".
PVC pipe is rated by two different systems, the first is the "class" system (Cl) the other is the "schedule" system (SCH). One type is not always better than the other. Schedule pipe is rated by the pipe's wall thickness, while class pipe is rated by the pipe's operating pressure.
Your non-mainline pipes should be CL 200 PVC and buried at least 10" deep (12" deep is the industry standard for commercial irrigation systems). Many homeowners use the CL 125 PVC pipe because it is cheap, but it breaks easily and they often regret using it later. If you can't find CL 200 PVC then use SCH 40.
If you think about it, $1800 for an irrigation system of that magnitude, installed yourself, is a heck of a deal. On a DIY job where you can save some serious money on labor, I wouldn't risk cutting corners on materials. Good Luck.
Tony Posey
Ridge Run Landscapes