Fix it, but call around first. The quote you gave seems high to me. I had some tranny work done recently for considerably less. Are you sure that the tranny is shot? It could be a bad module or pump. If so, it's only a couple hundred to repair. Pull out the dipstick on the tranny and inspect the fluid. If it looks and smells burned, then you have major transmission problems. Probably bad clutches or bands. But, if the fluid is red and there are no particles in or burnt smell, then your problems are probably much less severe. Most gargare don't want to do the small work, so they will tell you that you need a whole new tranny under the assumtion that you know nothing about cars and won't know any better. I would urge you to call around to a few places and have a couple people look at it before doing anything.
As for the A/C. Get yourself a self charging kit (about $35 at any autoparts store) and a can of A/C recharge with oil and stopleak (about $12) and do it yourself. It takes ten minutes. It's not a permenant fix, and you will most likely have to do it every year, but it will save you lots of money and get you through the summer months.
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"On this day, I see clearly." -Alterbridge
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