I just talked to the exhaust shop and they said that if they put in the weld in type of converter that the light will still come on. Now I'm really confused.

 

IMO that sounds like an upsell tactic to get you to purchase the entire downpipe. If the cat is replaced with one that meets or exceeds OE spec there is no reason for the light to come back on - unless it is a high flow cat or your rear O2 sensor is malfunctioning.

 

He said that the weld in "universal" type of converters don't have the heavy metal load required to keep the light from coming on. He told me that they could have the direct fit bolt on one in 20 minutes and that it would be $700 installed. He said that if I really wanted the weld in type he would weld it in for $40, but the light will still come on and I would have accomplished nothing.

 

The key there is the word 'universal'. You want a direct replacement so it will meet OE spec, but that price is way too high. You could purchase it yourself for a lot less then pay the $40 to have it welded in. If he doesn't want to go that route I'd look for another shop.

I just did a quick search and you can get the entire downpipe w/OE spec cat for a lot less money:

3.4:
http://www.autozone.com/autozone/par...75_253417_2149_

3.8:
http://www.autozone.com/autozone/par...76_253315_2149_

Add a few $ for gaskets and you're still under $300