Hafta chime in here, since I recently built up a 1983 Trek 620 with a modern drivetrain.

I went for the expensive route, Shimano 105 10 speed throughout. 105 hubs are spaced at 130mm and plenty durable. No problem getting them in, just spread the dropouts a bit. Modern Shimano bar-cons are excellent, running either indexed or friction for the rear and friction in front. Must be mated with an appropriate rear derailleur. I run a modern 24/34/48 crank with a Shimano 105 front derailleur shifting butter smooth.

For a more thrifty setup I agree with oldskoolwrench'srecommendation - switch to friction bar-end shifters and maybe replace the chainrings. Indexed shifting complicates everything - shifter has to mated rear derailleur, often requiring a modern cassette and thus new hubs. Dia-Compe makes some nice bar-end shifters, or you can use Shimano SL-BS78 or similar (just make sure they can be switched to friction, the newest SL-BS79 has only indexed for the rear) or then again, you can find some Suntour bar-cons on eBay.