The value of the bike right now is the ~$80 I've spent on the new tires, tubes, brake pads and having the shop look at the drivetrain. So if by putting another $150 into it I can get a bike that rides better than a $500+ model, I'd be very happy with it. $250 for a bike with good tires and a high end (for a regular bike) drivetrain doesn't sound like a bad deal at all. If I ride it 3 miles a day for 8 months a year it's already worth it (this is a minimum, an underestimate, not even including non-commute rides).

From what I'm looking at now:

New wheel/hub: $50
New cassette: $30
New shifters + derailleurs: $50-80
New chain: $30

If I get decent deals on ebay and whatnot, I think it'll come out closer to $150, but I should be able to get everything easily for $170 ish (I think).

The only thing I haven't figured out (about buying) is are there different years for each model? I.e. is there a deore say 96 which isn't even close to a 2012? If nothing else to help assess possible wear...