Suspension design has moved on, even putting a good rear shock, like a RP23/CTD and a good fork, say a Reba or 32 Float, will still give you a bike that was designed in and rides like a 1997 bike.
Would ride it as is before looking to put any money into it, and if you do put any major investment into it, like wheels / rear shock, would these be transferable to a modern bike? unlikely, as the wheels will need to be 9mm/QR rear, when modern wheels are going 15 maxle / maxle rear (although you can get some higher end wheels which come with conversion parts), and shocks need to be specific shaft / travel length for the bike, so is unlikely to be transferable. All the expense for this could be put into a 2014 bike, which will probably offer better long term value for money.
Also the Cannondale won't last forever, a friend who rides one, of a similar age to yours now has mismatched ends, as the rear snapped last year, and he had to source a replacement, can you get replacements?
Interested in how they got the X28 to work in the frame, as the bike was originally designed for a Headshox, which has a different setup to modern forks.