You have a "threaded" stem (the piece that goes from the fork to the handlebars). Unlike the newer threadless type, it can be adjusted for height, although maybe only a little bit. If you are not mechanically inclined the adjustment is best left to a bike shop because you can screw up the bearings if you don't know what you are doing. See the ParkTools.com website for instructions on adjusting if you are so inclined.

If adjusting it doesn't raise it enough, Nashbar sells a "comfort" stem for about fifteen bucks: http://www.nashbar.com/profile.cfm?c...eid=&pagename=

Note that raising the handlebars may make your brake cables too short, which means replacing them.

Replacing the handlebars is also a possibility. You have to get ones that are designed to work with road brake levers, like this one from Nashbar: http://www.nashbar.com/profile.cfm?c...eid=&pagename=

I find Nashbar is a good resource for older bikes as they don't always focus on the latest and the greatest. Remember when buying from Nashbar to go through the link in the "Affiliate Links" section. It doesn't cost you anything, and it helps support BikeForums.