From the photos, it appears that your brake pads are toe'd out rather than toe'd in and that they're not full contact over the entire braking surface. The pads should be toe'd in - that is, the front of the pad should contact before the rear - so that the pad is "pulled" into contact with the rim as you apply the brake. If the pad is flat or toe'd out (the rear of the pad contacts first) the front of the pad will be pulled away from the rim and it will "chatter".


I perceive a little misunderstanding behind your questions....

You seem to be convinced that your rim brakes are the problem and that it would be solved by replacing them with disc or drum brakes (as long as it can be done for less than $300.)

As far as drum brakes are concerned: Drum brakes don't have the braking power to stop the bike and therefore are not used as a primary brake. You will always see them on the rear wheel as a third brake used in ADDITION to a rim brake. They are used to control your speed on long, steep descents so that you don't overuse and overheat the rim brakes.

It also appears that you envision replacing the front rim brake with a disc. You cannot; the fork on your bike is not disc-compatible so you are "stuck" with a rim brake on the front. You could replace your brakes with a higher-quality V-brake or even cantilevers, but I wouldn't guarantee that it would improve your braking performance.

The bottom line is: You asked for the most cost-effective way to upgrade your brakes. Replacing the rear with a disc is feasible but not necessary and not cost-effective. Since there is nothing inherently wrong with your brakes, just get a left lever, get rid of the splitter, install new pads, and adjust everything so that it works properly.