Don't forget the cassette, handlebars (tape? stem? new cables?), possibly rear wheel, maybe bottom bracket depending on the cranks, and labor to get it all swapped out (unless the OP has all of his own tools and knowhow). Upgrading to ten speed road from eight speed mountain stuff is a big job.

I'm still with the guys that say ride it into the dirt, figure out what you like and don't like about it, and go from there. Or, if there's a bike that would better suit your needs, maybe you can return this one? Or flip it on ebay brand new?

Not wanting to be a dick, but the color scheme is exactly the last thing you should be concerned with if you're planning on being a frequent commuter and occasional distance rider. It doesn't sound like this is the right bike for you. Doing a total overhaul like you're talking about is very much like buying a frame and fork and doing a custom build - the expensive way to do things.