OP is way to pessimistic about this bike. The only major part you probably will have to replace is the shifters - the plastic ones tend to snap on the first shift after 20 years of disuse, but they might just work.
You mainly need some mild detergent in water, and some means of polishing up the (formerly) shiny bits. Just don't use steel wool or a steel brush, as this removes chrome and other plating. Brass/bronze wool or a rag and a big tub of Mother's billet polish.
If you're serious about removing rust, oxalic acid (deck bleach) works amazingly. Search these forums for more advice on using it than you can ever absorb.
You'll probably need new tires, brake pads (get some good quality ones, and braking will be decent, even if you keep the steel rims), and cables.
In all likelihood, if you lubricated all the pivots on the derailleurs with some oil and let it sit overnight, it might even shift properly without any other work.
The only things that will be difficult to do without special tools are getting inside the bottom bracket (where the crank spindle lives) to rebuild it in the case that the pedals turn roughly and getting the rust off the spoke protector. A bike shop can do this for you (edit: remove the freewheel so that you can drop the spoke protector in a bucket of oxalic acid), or find your local bicycle coop.
If you love this bike, buy it some dignified black cotton bar tape and a leather saddle.
Last edited by Roll-Monroe-Co; 06-18-10 at 04:39 PM.