I read someone here put 26 inch wheels on a frameset designed for 700c wheels and said it was an awkward feel that was not worth it.
I bought a Nashbar touring frameset (now on sale for $99) and I have V-brakes, a road crankset, rear LX derailleur, Brave Stiffee handlebars (high riser with a bar in the middle so I can put lights or cycling computer or eventually GPS). I ordered the Brave Stiffee handlebars from the UK though because I really wanted to have what I want. The project is not complete but I want it to be my personal choices throughout the bike.
I'm figuring a quality bike on a budget would be $800 but my personal choices might bring that up to $1200.