1.	You are the project manager for a software development project,
whose estimated cost through delivery is $425,000.  How much should
you budget for maintenance?  What is the basis for your answer?

Some questions for you. 

1. Define maintenance in your case. Does it mean support? Updates? Repair? 
2. What is the scale of your software? An Operating System? A small program?

As you do not give some details of the project, the general estimation
of maintenance fee might be half of the delivery. It includes support,
bug fix.

I would also want to know over what period of time are we talking about? Indefinate?

Based on your wording, I am assuming that the "delivery price" is
$425,000.  If this were a COTS product, that would be its price tag.

If you were to follow the lead of most major software vendors, you
should charge between 17-20% of the purchase price per year for
maintenance, which would include software updates and technical
support.  For this product, I'd price it between $75,000 and $85,000. 
This assumes that the product is being updated on a regular basis with
additional features being added and not just bug fixes.

Is maintainace part of the delivery price? If so, be VERY conservative.
No project at that price is turn-key. For that matter nor is any
project at any price.
From experience, make sure there is overlap in all phases of the project.

Answering a question like this is impossible without investing much
time and work. You might want to have a look at the Google Answers
pricing guide:
http://answers.google.com/answers/pricing.html

$1,700,000 based on pareto logic and the fact that work expands to
fill the time allocated for it.