that bike is definately an ideal candidate for a little fixer upping. REason why i was asking if you were gonna ride on the streets or offroad is because i just built a commuter using Nashbar.com Microshift MTB shifters. They are 9 speed shifters and are $30 and work great, I cant attest their durability in actual MTB situations but as flat bar road shifters they are great. The matching FD and RD are also $30 each.
The wheels don't look too bad but the casette looks like it's seen better days i don't know if a serious dose of WD 40 will do the trick or not. But all in all it appears to be a solid frame, crank looks alright and i'm going to assume it's the proper size for you so spending short money to get it up and riding again is probably worthwhile and then you can relegate it to a rain/utility bike if you elect to get something nicer down the road.
Definately get some slicks for it since your gonna be doing mostly road riding with it.