Something's not right here. First off, a 2000 V6 shouldn't have a smog pump anymore. I didn't even think Cali cars had them, and if they don't, a MD car sure wouldn't.
Second, I find it hard to believe that the pump, valve, and relay would ALL be bad ALL at once.
Third, if, perhaps, the dealer is in fact referring to your EGR system, then frankly, I'd run like hell anyway, because a dealer that doesn't know the difference between an EGR system, and ten year-old thermactor technology, is NOT someone I'd want working on my car anyway.
$700 is ludicrous. Find a new dealer/mechanic. Should be MAXIMUM a couple hundred dollars from a Ford dealer, less from a smaller/independent mechanic.
Driving with the bad EGR (or smog pump, if your car actually had one in the first place..) won't hurt anything. It's just emissions control equipment. It's fully driveable, but it won't pass an e-test.

Your gas mileage might be slightly poorer.
Edit: Apparently I was slightly mistaken - Ford did REadd smog pumps to some non-Cali 3.8s starting in 99. However, I still say something isn't right, and $700 for that is way too high. Take it elsewhere.