I just put in an XM reciever myself. The wiring is plug-and-play. Cost for the receiver and install kit was $250 (I believe you can get it from the internet for around $225). But your dealer isn't far off on his quote my dealer told me figure 4 hours for installation labor at $130 per hour. So that's up over $700 just too expensive.

I though installing it myself was rather easy but I've experienced with put in reciever in the past. Let me know if you'd like to look over the Toyota factory instructions and I'll scan it. The install took me 2-1/2 hours. Or you could just buy the reviever and kit and have it installed by car audio dealer.