It looks to me as though the Shimano is indexed as you can see that pin handle to switch between index and friction on the rear shifter. I don't personally own any of this stuff, so I could be incorrect. The add has no mention and it looks like the wheels are 27". If so, I would check into some 700c wheels, but you should have no problem with the brakes. Your problem is going to be having to change out the gearing in the back with an upgraded set of wheels.
No matter what, enjoy the hell out of the bike, and make the changes that will best suit your riding. nice pick up for 130 dollars and Post some real pics when it arrives.