jshelly,
That bike doesn't look so bad. the only big problem I see is that is has rivet chain rings. If you were going to replace one of the chain rings, you would have to replace them all. This wood require you to buy a new crank set most likely. Thats probably the biggest problem. To fix the rest ie, True the wheels, new cassette, and chain would cost between $100 and $150. Depending on your LBS and the quality of the parts. I would sell it right now, or put the $200 to $250 into it and just keep riding it!