Here's what i'd do:
1. Ask your friends who they'd recommend. Usually, if they did a good job fixing your friends car, they'll do just as good with yours (usually, but ya never know nowadays)
2. Shop around. If you want to be sure the job is done right, dealer is the way to go. They usually have a better warranty than other places. However, other shops can do just as good a job as the dealer, if not better, and for a cheaper price. Be sure to ask em about the warranty.
3. Do they really hafta rebuild the tranny? Look up the price of a rebuilt one, and add the price to put it in the car. Might be more than 1200, might not be.
4. Why'd the tranny go out in the first place? And is the tranny really shot? Take it around to other places. If there's more repairs that need to be done that just keep adding up, is it really worth keeping the car.