You can spend a lot to convert that Peugeot, but there may be a more cost effective solution. A triple crankset, dérailleurs, new rims, freewheel, fenders, brake upgrade, and it's OMG $400, not including racks.

Check out the drop bar MTB thread. Lots of great tourers built for very little money. My parakeet green Miyata Terra Runner cost 15% of a Surly LHT.

http://www.bikeforums.net/classic-vi...nversions.html