You are powering 4 IR receivers if you go the option 1 route and I prefer a bit more current once I power more than 2. Powering the receivers through 50 or 60 feet of cable might make my "overspecing" prudent in the long run once the walls are closed and the cabling done.
The 18 gauge wire has more copper than Xantech specs for the same reason as the larger power supply. Better safe than sorry. The cat5 to the receivers is to give you the option of upgrading to more advanced technology that sure will come along. Like I said, the wire is cheap. You could mess around with the 781 power supply but for the extra 15 or 20 bucks why take the chance.
What I suggest is overkill but in the profession I am in, I'd rather spend a few extra bucks than waste an additional trip.
The use of the CB-12 connecting blocks is redundant and just an additional source of failure. They are not neccesary. The cat5 will probably work for the entire system and I wouldn't lose any sleep over using it but I'm a belt and suspenders type of person. Telling my customer that Xantech said it should work, will not do me any good when I'm trying to get paid, if it doesn't.