Join Date: Jun 2004
Location: Northern Nevada
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I commuted for years, 25 miles round trip, on a mid-'80s steel Bridgestone mountain bike with road(ish) tires. If money is really a crunch, you might try swapping your knobbies for some smoother tires you can run at 75psi or so. 26x1.5 to 1.9 is a good size range. You'll be surprised how much faster you'll be.
If you want to keep the offroad capabilities of your present bike, I'd look around thrift shops (Salvation Army, Goodwill etc) for an older, rigid mountain bike, then buy road tires for it. Around here you can find good ones, barely used, for less than $50. I bought a Specialized Hard Rock for my son when he was in college for $25, and it came with a $35 computer and $40 Blackburn rack. They're plentiful, durable, easy to get parts for and not attractive to thieves.
For the riding you mentioned, I wouldn't worry much about weight or gearing. It's easier to take five pounds off the rider than the bike, and gearing is easy to change.