In order to be very cost conscience at the moment and just get the motor running, is it possible and ok to run single port 1600cc heads on a dual port 1600cc motor?

Should be no problem. I'm sure they have some early model 1200 heads that some would say be an issue and I don't mess with them enough to answer that ..
But the general idea is SP heads better on the low end and DP heads better on the Highway.
I've made the switch both ways plenty of time and have found no issues at all. Gotta have a
SP intake for your DP to SP switch-r-ru..
You could just see if your sleeve/jug will slip in the head and if so RUN-em

VW made a 1600 single port for one year. Its a good combination.

What is the average price to get a set of single port 1600cc heads in shape (parts & labor)?

You can buy new ones for ~150 each --> http://www2.cip1.com/ProductDetails.asp ... 353%2DAKIT

Having an old set re-done, depending on how much work they need, is probably going to be 100-150 for the set. If they aren't too bad and you're on a budget you could probably get away with hand-lapping the valves and calling it a day...

What are the key things to look for on the heads other than cracks and burnt valves?

If these single ports are junk, I might as well go with the dual port heads; I believe they are about $139 a piece (Mexican).

Edit:
PS. Let me know if you need any help going through a set of heads, I have a valve spring compressor so we can take them apart to check for guide wear etc...

Cool, thanx! Will do.

Yeah, honestly, it's almost not work messing with used heads unless you luck out and get a nice set. If they're used it's common practice to go ahead and replace exhaust valve, so that's ~10 per valve X 4, then you need a valve job, might as well do all 8 valves, so that's about another 50-80 for the pair, they should probably be surfaced, so that could be another 30 or so. So really, unless you get a nice set that you can just lap the valves and more or less be done with them then its better to just buy new. In which case you might as well buy dual port.

Cool! I appreciate passing on the knowledge.