1. Your choke point will always be your internet connection, not your internal network. Having a 1,000Mbs home network doesn’t do much if the best you get from Cox is 1.5Mbs. So… hardwire is faster, yes, but pointless for home networking. It also limits you to cabled connections in only the rooms that are wired. Any modern wireless system will have 8-10 times the speed/bandwidth of your Cox cable.
2. Unless you’re dealing with state secrets, wireless security is not an issue. Even WEP encryption would take an expert considerable time and effort to *****. Who’s going to bother just to see you surf on yahoo? Pffft… put your state secrets on CD. Your neighbors aren’t going to rent a mainframe for a week just to hack your signal.
3. Buy a good SRX wireless router. Set up WEP security and go wireless.

Today’s wireless are just as secure as any. He lied to you on that. Structured wiring is faster (bandwidth wise) than wireless most of the time. Depends on the wireless router and the high speed provider. For example, there are wireless routers out there that will only push out 54Mega bits per second while the high speed may push out 738 mega bits per second. Well, in this scenario, you cheated yourself by getting a slow wireless router. Try to compare the two (high speed modem and wireless router).
Definitely don’t pay $1000 for the wiring packet. You can do it yourself for about $200 (maybe). I ran my own wired cable and it only cost me about $150 or so with all materials.
I just recently upgraded to a wireless router which I was able to use my new laptop using the built in wireless but yet still able to run cabled computers into the wireless. Getting the best of both worlds on this one.

Simple answer…
1) Have them wire ONE ROOM ON EACH LEVEL with CAT5 or 6 wiring to a central point.
2) Make that central point the place you install your router and cable modem (also the point where you anticipate the main PC)
3) The other spots on each level can now either:
a) Host a PC without any further wiring, or
b) Can install a Wireless Accesspoint (WAP) to support additional PC’s ON THAT LEVEL.

You now have the best of all possibilities. A wired access (one per floor) to the main router, and possibility for expansion later (with no additional wiring) by installing WAP’s later where needed!

The problem with larger houses is that typical “g” routers do not have sufficient “oomph” to cover the whole house…

Another alternative is to try a newer “mimo” router for stronger signal to cover the whole house, but this may be risky, since if it doesn’t work, you are stuck!

Don’t be that concerned over security… You can use newer technologies like WAP2, and PSK/TKIP to adequately secure your wireless network.