Mike,
If your timing belt has snapped there is a serious risk that the valves and the pistons have connected at high speed resulting in bent valve stems, scored pistons and various other nasties. I would suggest that the quote that you got is conservative. I'd be happy to pay that if I blew mine. for a comparrison I did a timing belt on an old Subaru causing damage to one side of a boxer engine (flat four). For two cylinders it cost me Au$1200(
approx US$900) (mates rates) to get it all sorted and that's parts at cost rather than retail. You have a German car and it is highly likely that all 6 cylinders have problems. Get them to give you a written quote and if you love the car get it fixed at that price. Your alternative is to find yourself a good M50 twin cam motor. They aren't as smoothe but offer heaps more power. Correct me if I'm wrong here guys but about 60,000kms (40,000miles) is belt change time.
As for BMW ownership it can be a daunting experience for the un-initiated but don't be alarmed. My E34 is my 3rd and I have found that they are totally reliable and well worth the extra money that you spend on them. Keep abreast of stuff on this forum as there are many experts who can point you in the right direction.
Cheers
Wingman
'89 525i/A Exec 193000kms
'94 Subaru Liberty AWD Wagon
Looking for Merc 300TE
NSW, Australia