Step 1: remove those little axle positioner bolt thingies you can see in the rear dropouts. They won't help you any and they're hogging your useful dropout space.

the $125 Mavic/Formula wheelset mentioned above is fantastic for the price. If you buy a set, make sure to have the spokes tensioned and trued properly by someone that knows what they are doing. Mine were acceptably true right out of the box, but undertensioned and some nipples on the rear started backing off within 100 miles.

The wheelset should come with the extra-long axles if it's identical to the same wheelset Nashbar sells (where I got mine and paid $25 more. grr.) so adding spacers to the axle to match your frame should be no problem. Sounds like you need 5mm on each side and you'll be good to go. LBS should have spacers.

I'll echo what others say and recommend sticking to EAI, Dura Ace, or Surly for your cog, probably in that order of preference. Get a Dura Ace lockring.

For a commuter, something right around 70 gear inches should be pretty comfortable up to 25mph or so, and faster than that if you don't mind spinning faster than most geared-bike riders are used to. Here's a starting point for you. Set the tire size to what you plan to use. Red means a taller gearing than the target value, blue means a shorter gear. White is a perfect match, and anything fading from white to red or blue indicates the value is within the spread percentage above or below your value. You can control the target and spread and reload the chart to see what combinations gets you where you want to be. Pick something that gives you more skid patches if you can so your tires wear a bit more evenly.

http://www.basementfreaks.com/member...i=on&target=70