Both options are great choices.

Choice #1 offers the added ability of communicating controls as well as modulating heat.

Advantages of modulating heat is that the level of heat should equalize to add as much heat as your home is losing. So one avoids the cycle of "blast of very hot air, system off, house creeps colder, blast of very hot air".

Fan running longer on the modulating system offers the ability for better IAQ with longer filtration and humidification time.

Ron,

What is your location?

Has a heating load calc been performed? Even with an old home, the 80 K size seems too large for a 1200 sq ft home. I would want to see the load calc in writing. The York models are available in 60 K size.

Can't tell from the Lennox quotes what size dealer has recommended.

It is important to get the correct thermostat for any of these models for best operation.

IMO

I am located in central British Columbia Canada so we have cold winters right around freezing or just under and warm summers around 90-100 degrees. The lennox quote did not have the size I will need to confirm on Monday. Interesting that all the contractors I had in (7) none did a load calc I guess I should ask these two to provide that in writing

Thanks for the help I just want to know if modulating is really worth the extra cost, if I am going to see the savings to make the payback period reasonable vs a 2 stage.

Unless you're also doing significant work to seal your 100 year old house and tighten and upgrade the duct system, putting a modulating furnace into an old house may not be a very good idea.

The long cycles (or continuous fan operation) will result in a lot of heat loss to leaky, poorly insulated ducts. If you've got any leaks in your supply lines, the negative pressure inside will be suck in cold air continually as the fan runs.

Modulating furances work best in a new house that has been designed and built to accomodate it. As a retrofit, especially in an old house, it's not a great choice. Stick with the blast of hot air idea, it'll be more efficient and comfortable.

Thanks for the advice, that was my thought with the modulating system since the house is so old and the duct work would is not being updated I was concerned with heat loss and the furnace continuously working, I am looking to find the system that will save me the most $ on heating which appears to be the 2 stage variable?

Your HVAC contractor should be giving you advice that's responsive to your needs and wishes, not just quotes on the equipment they want to sell you. If you're not getting that, you maybe should find another contractor to work with.

You say you've done insulation work. Does that mean that your house is now tight and well insulated, or is it just no longer a drafty 100 year old house lacking insulation?"

If you've done little or no duct sealing and air infiltration sealing, I'd spend money on those things and buy a cheaper (maybe even single stage) furnace, Even a two stage furnace is going to have longer blower runs, and if you have duct and air infiltraction issues, that isn't a good idea.

$500 of duct sealing and caulking, etc., can do wonders. The older your duct work is, the more likely you've got lots of leaks and gaps.

Ron

Not certain I agree with the previous post about heat loss between a two stage versus modulating furnace. However, it would be shortsighted to purchase a new furnace without a thorough evaluation of existing ductwork system including leak test and insulation qualities. Find out what you have and the cost of a new ductwork system.

Keep in mind there are three parts to a successful new install.

1.quality HVAC
2.the actual install by the dealer
3.and probably the most overlooked and ignored is a good ductwork system

Think about it.

IMO

The ductwork is not updated and it would cost about $5k to upgrade it all which I really don't have right now. I need to do a furnace upgrade first as the one i have now is not functional, so i was thinking of the 2 stage as I am planning on staying in the house for at least the next 5 years. The insulation work that has been done is essentially the windows and attic insulation so I guess it is still a 100 year old house not lacking insulation.

It would be a mistake not to have the evaluation of the ductwork now to know exactly what you have and what its shortcomings are.

IMO

Thanks Tiger, I think I will try to get an evaluation of the ductwork before proceeding, I just kind of have my hands tied for this winter at least with needing the furnace so I may need live with the ductwork until next year then look at replacing it if need be.

There may some stopgap measures you could take before replacing all.
If you have any hot/cold spots in your home, this needs to be followed up on as surely they are ductwork related. Adequate return is a must. Dealer should check size of trunk line, supply runs, return(s), leaks, and decent insulation. Not sure what code is for your area but minimum R8.

I certainly would not want to oversize a nice new furnace because of a leaky ductwork system.

IMO

I am going to have a couple of dealers come back in next week to follow up with some of the suggestions, thanks for all the input it has definitely provided me with some more knowledge to ask the dealers about.