I agree with the others, this sounds like a bargain. That's $50 an hour, which is dirt cheap. Usually that's the going rate for a single hour. I do tend to think a 2 hour estimate is a bit high, but if he's only charging $50/hr, no big deal.
Of course you don't list how much the part will cost, so that may ultimately change things.
I work for a national retail chain, fixing things internally, and we charge stores $50 just to diagnose a system. Repairing it can cost quite a bit more, depending on what kind of damage the stores think we'll miss.
The only real issue here is that the estimate is for 2 hours. Even if it's only $100, that says to me either the guy is padding the bill OR isn't very good. Time was, I could swap out a motherboard and display panel on some Dell laptops in under an hour. So I'm a bit skeptical about the two hour estimate... But, if that's just an estimate and the guy ends up charging you less, no problem.