if you're going to convert, you can probably just get away with replacing the rear wheel, and a decent wheel shouldn't cost you more than $350. if there's anything else you might need, it'd be the bottom bracket, and basically, all you need to find out what spindle length you'll need is a ruler, or caliper to measure the optimal chainline for your frame and do a bunch of other math that i'm too tired to recall at the moment....or have a shop do it for you.
you can run a 700c wheel in the back if you're a) not going to run a rear brake, or b) get a long-reach caliper.
if you do a conversion, you'll learn a lot more about how a fixed gear bike comes together, whereas if you just get a complete stock bike, it'll be all set up and dialed. personally, if it's your first, i'd convert and learn about it, then get a nicer frame down the line, and swap the parts over.