How much “discretionary funding” do you have set aside in your personal budget? If you’re unconstrained go buy a new road tandem and keep the Los Dos for off-roading!!!
Seriously, this would appear to be a very personal economic decision driven by:
1. Your available discretionary funds,
2. the re-sale value of the Los Dos, and
3. how much pleasure you’ll derive from “upgrading” vs the other things you could do with the same discretionary funds. I note that you didn't mention how enthusiastic your wife is about all of this which is certainly a factor in how the "fun money" gets spent.
For the upgrade you’ll need new bars (possibly stems), 8 speed STI levers (unless you’re also upgrading the cassette/rear derailleur), larger chain rings, travel agents to allow the use of the STI levers with the V-brakes and road-worthy tires. Find your best price on the products you’re interested in to come up with your upgrade cost: $175 - $350 depending on the grade/quality of new components and any “deals” you might be able to find. Obviously, you could spend a lot less by getting the parts second hand.
Next, do the math on the cost of your upgrades + the “fair market value” of your Los Dos to establish your going in position for comparing your sunk cost with the cost of a new or used road tandem. As for coming up with the fair market value of your Los Dos, finding used tandems, seeing what is available in the way of new tandems and/or finding a tandem dealer... links to all of these resources are here: http://home.att.net/~thetandemlink/tandems.html
After you amass all of that data, go for a ride on the Los Dos with your beloved and as you ride think about how much more you’d enjoy your ride if:
A. you were riding an “updated” version of your Los Dos,
B. if you were riding say a slightly used lightweight steel or aluminum tandem with 9spd STI, road gearing, and high-quality 700c wheelset for which you paid perhaps $2,500, or
C. a brand-spanking new tandem of your choosing with all of the latest goodies and perhaps a special paint scheme for which you paid $3,800 - $?????? (the sky is the limit - how about $13k for an S&S equipped Calfee TetraTetra).
My opinion? If you had the available funds, buy a two - three year old used road tandem (Co-Motion Speedster, Burley Duet or Paso Dobles, Santana Arriva or Sovereign, Cannondale RT3000, etc..) and ride the heck out of it for a year. During the year, decide if you want to keep or part with the Los Dos. Also, decide if the used tandem you purchased will meet your long-term needs or, based on your experience, if you're ready for a new tandem with all the bells and whistles, perhaps even couplers so that you can travel with your tandem on cycling vacations. If you decide to go whole hog with a new tandem after the first year on your 2nd hand roadie, you should be able to re-sell the roadie for just a little bit less than what you paid for it. Add those dollars to the ones you recoup if you sell your Los Dos and you'll find that the cost of the new-new tandem might fit nicely in your 2004/2005 budget.
Just some thoughts....