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Default buying a house with Weyerhaeuser siding

Hi,
I've already posted a short message about siding, here's the situation
in more detail and a different set of dilemmas.

We made an offer on the house, but the house inspection showed that it
has got Weyerhaeuser siding. The siding is been recalled. If damage is
found (buckling, etc.), the manufacturer will compensate. However, the
inspection found no damage so far (to the house or the siding). If we
buy the house, we have until 2006 to discover the damage and claim the
money. Alternatively, the sellers offered to replace the siding at
their own cost (considering that the offer is reasonable).
Inspection's estimate is that it may cost 12K, my feeling is that it
should cost more, because the house has a lot of surface.

My realtor recommends that we ask the sellers to replace the siding
before closing. I'm concerned that their choice of materials and
construction decisions may not be best, considering that they are not
going to stay in the house. Additionally, if there is rot or other
problems under the siding, that the inspection missed, they may be
inclined to ignore them or at least cut corners, because their goal to
sell the house.

Another option would be to take the 12K (or a better estimate from a
siding contractor) and do it ourselves before or after moving into the
house. In this case, if there are other problems (like rot), we will
be responsible for them.

Or we could just take the money and wait for a year or two, find the
damage and replace he siding at Weyerhaeuser cost (most unlikely,
because the damage has not occurred since 1989)

My questions:
1. Should we take the house at all?
2. Would you recommend replacing the siding right away? I suppose it
will cost much more to replace it in 2 years?
3. Should we let the sellers do it?
4. I'm more inclined to taking the money and doing it myself. Is it
possible to replace the siding while living in the house? (Do it after
the move)
5. Could you please recommend a good, but low maintenance siding. (As
easy care as vinyl). Is steel a good option?

We live in the North West.

Thanks a lot,
BK