The setting sounds like it could be priced well. With .80ctw of baguettes anyway. Maybe see if you can haggle a few hundred off, and get it for $1500, then I'd feel better about the price. Our setting has .80ctw rounds on it with plat and it is a little more but we are having it custom made.
Also--on the prong head vs a basket setting, it is really your preference/choice. I liked basket setting because it seemed to frame the stone slightly and look a little different and some like the extra protection, but in the end we went with a typical 4 prong setting but I specified that I wanted the prongs to be very small, not like some of the settings I have seen where the prongs are a focal point on the stone. Our jeweler's wife has a ring like the one we are having made and her prongs are very small and she has never had a problem with the prongs not holding the stone or loosening etc. So it really speaks to what your preferences are.