I just put a modern Shimano Acera on my 37 year old touring bike. I think it's a pretty good derailleur for the money (30 USD here in Sweden). It doesn't look too bad on a bike like this and would work with most Shimano indexing.

If I were putting it on an actual mountain bike, I'd have gone more upmarket, but for commuting, fun rides and light touring, I'm sure it'll be fine.