Originally Posted by
Salamandrine
That said, if you really wanted to hot rod the bike, the first thing would be to go with better wheels. Frankly Japanese clincher rims from this period were mediocre at best. I'd respace and realign the frame to 126 (6-7spd) or 130 (8-11sp) and go with a more modern set. At that point you'd need to replace your derailleurs and shifters, and purchase a freehub and chain. All in all it would cost more to have done than the bike is worth unless you do it yourself. 126 and 6-7 speed friction would not require new derailleurs.
I was thinking along this line for you, too. I am building an '85 Schwinn Tempo from frame up. My debate was whether to keep the hub spacing at 126mm for 6/7 speed or increase the spacing to 130mm. I found that there are a lot more modern wheels available than 6/7 speed wheels. I just picked up a set of Mavic Open Sport wheels with Shimano 105 (8/9/10 speed) for well under $100. There were many similar options, as well. Plus you will have many more tire size options with 700c rims.
This will probably break your $250 budget, however a 3x9 drive train could give you plenty of gearing options.
Dennis