ANY 2 stroke that is properly rebuilt and maintained should be able to go at least 120-150 hours before needing new rings. The cyl plating that is used on alot of stuff now, helps reduce the ring and cyl wear and reduce friction. I have heard of some going past 300 hours, not saying they probably didn't need a rebuild earlier. lol
Detonation is difficult to tell with a 2 stroke, as it is hard to hear over the engine. About the only way I know of is to remove the seat, and do a full throttle launch from a standstill. It will not burn off all the fuel at the designated time, and ping. He is right on a computer controlled 4 stroke engine, but the knock sensor and ecu can only compensate for so much. What it does is send a signal to the ecu, and the ecu retards the timing to the point that the sensor no longer registers it. You can check this systems function by tapping on the block by the sensor. It will register it as knock, but you need a diagnostic tool that shows the timing to see it happening.
Pre-ignition is two combustion processes happening in the chamber at pretty much the same time. One starts prematurely, and the other starts on time, or they both start simultaneously on separate sides of the combustion chamber. The result is that they meet somewhere in the chamber, and the collusion of the two is what you hear, so instead of it being a smooth combustion process, it is a very harsh, and violent process that can fracture pistons. It's the difference between squishing a marshmallow, and squeezing an egg to the point of breaking.
It can be cause by several problems. Lean fuel mix, hot engine from cooling system issues, or a lean condition, lower than required octane fuel for the current compression, timing is off.
It can run ok if the power valves are not functioning correctly, or at all. Depending on their position will dictate what your top end is like. If they are stuck closed, hole shot at part throttle will be decent, but anything over that will be crap. If they are stuck open, hole shot will be crap, but it should hit like a banshee in mid to top end when the power band comes in like the old dirt bikes did (a rich bottom end can act like this also as it gets to a point of enough air flow to lean it out some, like when a carbs regulator diaphragm is in backwards (don't ask lol)).
Your 1200 should be capable of easily getting into the 50's in stock form, with a good engine properly tuned. My 97 STX1100 is supposed to be able to hit 56 or 57 in pure stock form with a good engine, and this thing is huge.
If it is a actual service manual, it will have more information than a clymer or chilton manual.
Yes you can do it. It's not difficult.
You will prob not need a full engine rebuild kit, just gaskets, pistons, and maybe rings. It all depends how bad the damage is. This is going on that he had the crank rebuilt, and it is still in good shape. All the main bearing must feel like glass, and not have any excess play, and the rods must not have any vertical play at all, and also be glass smooth. This can usually be checked before splitting the cases but using the rods to spin the crank. Just be sure and don't let the other two rods just flop around. They need to be held, if nothing else so you can feel the bearings accurately. Not sure why he wants 2500.00 if the bores and crank are good. That and the crank are the two most expensive processes in that engine.
If you do split the cases, you will need some three bond 1211 to seal them back together, a flywheel puller, and a drive coupling remover. Just a real thin coat.
Get some carb kits from the jet ski store, and rebuild those carbs. Since it was running ok, I would leave the mixture screws in, but check the settings of them, and blow the passages out with low psi air. The kits are about 35.00 each. If you want to be super thorough, get a mikuni 100psi popoff gauge.
Once you see how simple all this really is, you will beat yourself up for not doing it before.