The Neon engine is an interference engine, so if your timing belt breaks, it will likely cause serious damage when the pistons crash the valves. Here is an explanation of how your Neon timing belt works:
There are many brands of timing belts. Ask your mechanic why he uses that brand and if there is a warranty on the job or part. The belt itself is only about $50 but there is a lot of labor involved. The price you were quoted sounds about right and yes, you should have the water pump done at the same time and the tension kit is a good idea.
There are lists online of non-interference engines - in which a broken belt means you just lose power and coast off to the side of the road - with no engine damage. If you're a used car shopper looking to minimize future maintenance costs, you may want to consider that in the future, or an engine with a timing chain rather than a belt.