If you are going to allow for multiple docks then you have some issues to contend with which may or may not be necessary.
1. Do you want/need the ability to play from a single dock to multiple locations?
YES: You will need some sort of source selector/multi source multi location product.
NO: You don't necessarily need equipment run back to a single location.
2. Do you intend to have long runs of analog audio through walls?
YES: You should probably be using a balanced audio converter to deal with line noise.
NO: You can use more standard shielded audio cabling.
If I were to do this right, then $1,600 is very reasonable and would give you mutiple docks and distributed audio zones.
If I were to do this CHEAP and good, then I would be looking to put a dock or RCA connection point in each room and then run it to a small amplifier in that room and hide it (like the linen closet) then run it to a volume control and speakers. It makes a stand alone stereo zone and the labor impact would be extremely cheap for wiring.
For distributed audio done full on, you will have CAT-5 and/or shielded audio cable to each source location (assuming 3 here), you also have speaker wire run to each room - so you are looking at about 6 runs of cabling which are around 60-70 feet per run. Speakers need to get installed, wiring needs to be terminated, keypads/etc. need to be installed. It may take 2 full days to do this work and at professional rates thats 16 hours at about 70 bucks an hour, so about $1,100 in labor + materials.
If you go with 3 in-room solutions, then the entire setup and materials are less money overall and you could potentially be closer to one day of labor.
I personally just had my house WIRED for a lot of audio/video and it ran over $3,000. No hardware, just wiring.
Bottom line is that the labor involved in running wires is costly and time consuming. It's not a rip off, it is simply time consuming to do it.
