OK, first off (short) definitions....
Woodstove - Free-standing box designed for heating. May be placed in an existing fireplace if it fits, but not really designed or intended for it. Connects to existing chimney w/ stove pipe, or may use a new "Class A" prefab insulated metal chimney, or some combination. Does not need any pre-existing chimney or fireplace to install. Intended for heat output.
Insert - Essentially a woodstove firebox that has been modified to fit inside an existing fireplace, typically uses the existing chimney, frequently in combination with a stainless steel liner to improve draft, make cleaning easier, and fix cross sectional issues. MUST be installed into an existing fireplace, however usually will NOT work with ZC fireplaces (unless specifically tested and approved with a specific ZC unit) Intended for heat output.
EPA Fireplace, ZC HEATER fireplace - A complete replacement fireplace that is designed to be a high efficiency heater, offering heat outputs similar to an insert or free standing stove, and burning with similar low emmisions statistics. typically connects using generic "Class A" chimney. Designed to have little or no clearance between the outside of the stove and adjacent combustible materials. Does not require a pre-existing chimney or fireplace to install, although may be used to replace a pre-existing ZC unit, which usually will also require replacing the existing chimney as well.
Conventional fireplace - classically a fireplace built from masonry, connecting into a masonry chimney, hopefully lined with clay flue tiles. Must satisfy significant code requirements for clearances to combustibles, and construction techniques. There are also SOME "Heatform" type fireplaces that were built in the 40's and 50's that used a metal firebox, often surrounded by masonry, and feeding into a masonry chimney - They often had a double wall construction with vents on the face or sides of the fireplace surround, intended to do some convection heating. They were built to the same standards as masonry fireplaces in terms of clearances, and as long as they are in reasonable repair, can be used with inserts. Non-efficient heater, may actually be net energy waster.
Zero Clearance or ZC fireplace - (non EPA) - Primarily decorative, commonly seen as low cost "builder box" units. Non effective heater, made from metal, normally with manufacturer specific chimney, found in "budget built" homes, may NOT be used with most inserts. Designed to have minimal clearance requirements to combustible materials.
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So the key question seems to be to determine just what you have for a pre-existing fireplace.
The metal firebox and chimney suggest either a metal heatform unit, in which case you would probably be best off with an insert, and probably a liner in the chimney, or a ZC unit, in which case you would want to replace it and probably replace the chimney with a "Class A" prefab chimney (which you might be able to run down the existing chase)
The metal firebox and chimney suggest a ZC box, but the brick chase, and the brick surround sort of suggest that it could be a heatform. Hopefully your condition report would say what you have, or you could get the info from the sweep that did the inspection.
Is the brick chase for the chimney on the outside of the house? If so, you would probably need an insulated liner, although that could be a challenge to fit inside a 7" square flue...
As to costs -
If the existing unit is a ZC box, you pretty much are going to have to replace it - in which case it sounds like the Magnum unit is a good deal
If it's a heatform, you have more choices, either go with an insert or rip everything out and go with the Magnum. There are three main parts to the job - the unit, the chimney, and the installation. I saw an earlier post suggesting the Englander insert, which is probably a bit less, and can be purchased from your local big box store (HD, Lowes, etc...) I don't know Englanders price list but I believe their insert (if it will fit) is around $8-900. A full 6" liner and insulation kit will probably run about the same, depending on your chimney height, the quality of the liner you pick, where you get it, etc. Installation I have no real idea on, but it would probably be your lowest cost option There are lots of other inserts to choose from besides Englander, but they tend to be much more expensive. Englander is targetted more at the budget market, but makes a high quality unit. Some folks don't care for the way they look, but in terms of "BTU's per Buck" they are real bargains.
If you go with the Magnum, you will need to rip out the existing firebox, probably the existing flue, and put in the unit itself, along with a much more expensive chimney system - I think you'd end up spending more money.
Gooserider