rgm18,
If the total is only $790 then it will only let you do 20k (or you can choose say 30k and get a slightly worse redemption rate) and then you pay the rest. It won't let you do 40k to redeem $800. I suggest getting the travel insurance to get the total up over $800. I think there is a box you can check somewhere along the checkout process to buy the travel insurance.
As for the inability to redeem points, it is supposed to come up in the final checkout page. You should be able to select your Travelocity Amex and see a dropdown to redeem various points. I realize it's frustrating if it's not coming up (been there myself). I can only recommend the various techniques that seem to have worked for various people:
- try other browsers
- try deleting the card from your travelocity.com acct and readding it
- try calling travelocity amex and asking if they will post it manually