dogboy - let me clarify, i had an old steel schwinn paramount (an arguably classic frame)... the first shop i brought it to said the "replacement value" would be like 5-600 since it was an older bike.
the next shop recognized that even though it was older it was still a nice bike which should be replaced with a nice bike... hence the price discrepancy.
now; that said i used the money to buy a new frame and built a cheap singlespeed which i now use to commute on. with the insurance check money, i had enough money left over to buy my girlfirend a frame as well... this, i don't think is fraud???? they gave me the money to replace my bike with something comperable, but what i do with that money is my business....
for my example, i meant that a bike can be totalled, in that it would cost more to fix into original condition than it would to just buy a new one... but you could still maybe get it back into riding shape, assuming the frame isn't damaged, using cheaper (possibly used) components for the time being so you have something to ride till the insurance settlement comes in (which can take months!).