Mine had the Dia Compe cantilevers as well and they worked fine. I adjusted the pads properly and it stopped just fine even with 230lbs on it. If you decide to go with 700c wheels, the cantis should be able to be adjusted to accept the smaller wheel. I had 700's on mine for a little while until I could replace some spokes on the 27's. I think the OE hubs are Sunshine and mine spun forever! Super smooth

As far as the half step gearing goes, it wasn't too bad. Where I live there are a lot of rolling hills and it worked fine. I tried to use the granny to climb a steep hill but found it was too small for me to properly spin. I switched to a 42t middle ring and that took care of most of my climbing issues. My advice, ride it for awhile w/ the half step and see how you take to it.

One of the things I had in mind for mine was bar end shifters. I think a sports tourer is more appropriate with bar ends than with d/t shifters but thats just me. I'll look around and see if I have any left over parts from mine