Join Date: Oct 2004
Location: Cary, NC
Bikes: 1983 Trek, 2001 Lemond, 2000 Gary Fisher
If the mountain bike has a rigid frame and fork, it should serve very well for general commuting and paved trail riding. Suspension frames and forks are less desirable for use on pavement because of their added weight and their effect of absorbing some of your pedal stroke power. An old mountain bike is also less likely to become a target for thieves than a new bike, which is worth considering if you'll be parking it outside. I've come out of late classes to find cable locks half-cut.
I used similar tires on an old mountain bike for commuting and they are much better than fatter, knobby off-road tires. However, I eventually switched to even narrower, higher pressure tires for even lower rolling resistance. You may have different preferences based on the pavement conditions where you ride.
It needn't cost much money to improve the way your existing bike performs. A new set of brake pads, brake cables and a derailer cables along with some cleaning and lubrication will make it brake and shift like new. You can buy all the materials for under $50 and do the work yourself with very basic tools - it's not very hard, you can find instructions lots of places, and it's worthwhile to learn since these are things you'll want to know how to maintain.
If you start riding farther distances or start trying to keep up with groups on road bikes, you may find yourself wanting to increase the top end speed you can sustain. At that point it will make more sense to consider investing in a road bike with less aerodynamic drag, rolling resistance, and weight. Do a back-of-the envelope calculation of how many work hours it will take you to pay for upgrading to a nice road bike versus the time you'll save by being able to go a few MPH faster. The decision will most likely come down to just how much you think you'll enjoy the road bike. I love drop-bar road bikes, but don't let me sway you.