I posted a blog here on Trulia called "The Rules of Refinancing." Check this out, and let me know if you think I can help. I am local and can certainly address your specific questions about determining the financial break points for making a refinance worthwhile.
If you plan on staying five years and you're break even is 16 months it seems like a no brainer to me. However, you may be able to get a better rate. We are in the process of refinancing our home and just locked in a rate of 4.875% with no points on a 30 yr fixed. I think you should shop around some on rates. If you want some recommendations let me know.
Lance King/Managing Broker
When you are presented with an option to buy down interest rates all you need do is exactly what you've done. Project when you break even and knowing how long you plan on staying in the property calculate your savings over that period of time.
One other factor can come into the equation for some is the tax benefit in the year that you pay the point. That can make adifference if the other numbers are close.