It's been over a year since the original question, but.
The coolant/heater bypass valve sits on the firewall and is highly unlikely to be affected by replacement or work on the radiator.
The bypass valve is noted for leaking - most info I've seen says they go bad after about 7 years or around 100k miles. I've got a 2005 with 60k that the valve just went on. Conversely, my 2000 with 140k is OK (at least before I jinxed myself).
Typical MO is that you will start with a small leak which will quickly change to a big leak. In my case, a warning for low coolant with no obvious sign of a leak followed by another warning a few weeks later, only this was quickly followed by a big puddle under the car. For my car (I-4), the puddle ended up under the rear of the transmission or near the rear mount of the front left suspension A-arm. (It took a little while to figure out where the leak was since that's about a foot to the front and left of the valve.)
I would think you should be quoted about one hour of shop time, and the part is about $115 (much less if you shop around to do it yourself), so the $260 estimate is way over what I would expect.
Wednesday, September 9th, 2009 AT 11:29 PM