That is the million dollar question. I have seen quotes from other companies as high at $30,000 to optimize a 7 page site! What should SEO cost? Depends who you go to and how well they know what they are doing. It will cost you a mere $500 an hour to consult with Aaron Wall of SEO book. Yes to consult. Aaron wrote on his blog “consulting costs $500 an hour”. If your site is fairly large you will be looking at at least $20,000! Now that might be a little too much for your adverage website owner.
Aaron has been in the busienss a long time. He certainly knows his stuff. But, if your a small guy a few hours may be out of your budget. I am not saying you need to pay $500 and hour or $10 an hour. Just be sure you do business with a company that can provide references.
There is an article on my blog that talks about what to do before you hire an SEO. http://mr-seo.blogspot.com/2005_04_17_mr-seo_archive.html
FYI: I am no Aaron Wall. My cost is less than 1 quarter of what Aaron charges. If you need SEO see Mr SEO