Originally Posted by Tim_Iowa

Fit is a very big deal. How tall are you? What size is the bike? Measure the distance from the crank to the seat clamp (center of the crank bolt to the approximate center of the seat clamp lug). A rough rule of thumb for bike sizing: take your height in feet and inches, subtract 3, and that's a good frame size in cm. Ex: Bob is 5'10. He should ride a 57cm frame, give or take a cm or two. Of course there are many more variables, based on body shape, torso/arm length, etc. But it's a good guideline for traditionally styled road frames (level top tube).

Another rule of thumb: stand over the bike, in front of the seat. You should have no more than an inch or two between your crotch bones and the level top tube. Any more than that and the frame is too small.

Ensure this frame fits before you spend too much time on it.

RE: MTB components:
Yup, your frame has Deore components. They look to be early 90s, about the same age as the frame. They're designed for MTBs but work fine on any bike. The rear derailer can handle a much larger cog (~32 teeth) than most road derailers (~28 teeth). That gives you lower gearing for hills. I use a MTB rear derailer on my touring bike for that reason. The Deore crank is a triple, which also gives you lower gearing. It has smaller chain rings than a road crank, however, so that takes a little away from your top speed on downhills.

As cyclotoine says, these parts are perfectly fine and should work well on this bike. MTB components are generally a little heavier than those for road bikes, and are usually more durable due to that.