I converted a Giant Rapid 2 last year to a drop bar. But the Rapid is more of a flat-bar road bike anyway, with caliper brakes and frame similar to its dropbar cousin, the Defy. For me it was just a simple matter of swapping in a drop bar with used STI shifters. Cost me a bit over $100, but I love the ride.

For you, because you've got v-brakes it might be trickier. For the cost of doing it with half-decent components frankly it's not worth it. A set of STI shifters, let's say 8-speed Sora triple and a set of bars used would be about $100.

Then a set of canti brakes, let's say Shorty 4's, is $60 new, but perhaps they can be had cheaper used, but not that easy to find.

You can hold on to your drivetrain, but will have to swap out your 7-speed cassette for 8-speed. No biggie. They're relatively cheap.

You could make the conversion for about $200.

I'd save the money toward a new/used road bike with drop bars if I were you. You could probably find something decent in the $400-500 range used, like an alloy frame w/composite fork and Sora, and possibly Tiagra.