If you're totally set on the Dew, it's a completely completely capable bike.
(Looking at Kona's site for the 2008 basic Dew)
You're right about the frame accepting both front and rear racks. Disk brakes are GREAT for descending, but those v-brakes should do just fine- better than cheap sidepulls, IMO. The drivetrain looks capable enough (low-end, but thats just me being a snob). Chainstay length looks good enough.
As for upgrading- Saddles and tires are up to you. For handlebars, I have a couple simple suggestions- theres really only one hand position on that bike, and you'll want more. First, consider adding some bar-end handles. It's a quick way to get new hand positions. If the standard round grips don't feel right over long trips, try ergon grips ( http://ecx.images-amazon.com/images/...500_AA280_.jpg
). Beyond that, if you want MORE positions, get some trekking bars ( http://www.nashbar.com/nashbar_photo...-NCL-FRONT.jpg
). They're cheap at REI or Nashbar. You can simply transfer the old grips and shifters over (those bar-end handles, if you get them, will probably bolt on somewhere, but they might be pointles- YMMV.)
Drops are POSSIBLE on that bike, but 1) the geometry of the frame is set up for flat bars; I would only attempt drops if the frame were honestly too small for you- and then 2) you'd be talking about swapping the stem, bars, brake and shift levers. At that point, you might as well have just bought a drop-barred road bike).
OK, that's enough from me right now