Re: When do you say, "I GIVE?"
Nobody can tell you what to do here.
Generally, my feeling is that if people can't afford to pay you for an option, their ability to get the film made is probably negligible. But it has to be said that $10k/year options + WGA scale rewrite have gotten a lot rarer.
12 months at $1k is a total deal for them.
It comes down to how much you think they have the ability to actually do something with the script. If you think they might be really able to turn around and get it made, maybe it's worth it. If not, it's okay to walk away. If they were interested in it, then chances are someone else would be, too.