Politicalgeek, I did exactly what you're proposing and I'm pretty happy with the results. I bought the Nashbar road frame marked down to $99, with a 10% discount, and built it up using old crappy parts that I had laying around. I've been using it as a commuting bike for a couple of months now and I'm really happy with it. Here are some observations based on my experience:

• It does have eyelets on the rear drops for a rack. You just need to buy a seat post clamp with an integrated rack mount; costs about $10 (see below for an example)
• It does not have brazes (or clearance, probably) for fenders, but I bought some SKS Race Blade fenders that work pretty well.
• The finish is really nice, and has been pretty durable (so far) in terms of chips and scratches from being locked up various places.
• Even though I had all the parts, it still cost more than I'd anticipated. A couple of cable guides, an unexpected tool, 'soft' items like cable housings and bar tape, it all adds up.
• Assembling the bike from scratch was one of the most satisfying projects I've ever done.

I'll see if I can find a photo of the bike. In the meantime here's an example of the seat post clamp you will need: