Your 16-17 year old water heater is well beyond the typical life span here in the Philly area. Gas water heaters here typically last about 12 years (plus or minus 2). I have seen very very few 15+ year old water heaters still in operation, but not many.
I think what has been established on this thread is that the cost of replacement depends on your area of the country. The original poster was getting quotes in excess of $1000, while here around Philly $600-800 is the norm (I have had dozens of clients need this and seen several quotes in this range to verify it), while others in the midwest and elsewhere come in lower than that.
It is a very common task, and I would receommend you call a few plumbers for a ballpark estimate over the phone (many won't do this, but some will).
Sherlock Homes Inspections
www.SherlockHI.com