>>Here's my last question to my fellow pros: How do you handle this situation? Do you be rude? How can you put it in a way that this possibly future customer will eventually learn the hard way, but buy from you next time? Will this person EVER learn their lesson?

Never be rude; it's not professional, and lowers you in the eyes of the client. Be polite, explain your position in one or two sentences, tell 'em you are a better deal for them because you will be there after the installation is complete, answer phone calls, deal with problems and so forth because That Is How You Make Your Living, not by Selling Boxes. Then go silent. If the customer presses on the topic further, tell them that's really the entire story, and if they need you in the future, please call. Every client I have is a better negotiator than I, and if I go down that road I will loose.