Some quick answers...

V-Brakes in the rain: They work perfectly well in the rain. They may squeal when your rims get wet, but that's normal. The real stopping advantage to disk brakes comes when you're trying to stop at 50 km/h on a steep descent in the woods with mud caking your rims. V-brakes will perform very poorly in that kind of situation, disk brakes will be much better, Ask yourself if you will ever be in that situation.

Rust: Although steel does rust, quality steel bicycle frames will not rust in normal use for many, many years [we're talking decades here]. Just pop the saddle off your bike after you ride in the rain and drain out any water. You may also want to spray the insides of the tubes with WD40 a couple of times a year. Unless you leave you bike outside in the rain every night, you will not see any rust on the frame.

Overstock: It is hard to sell bikes. Period. Bike shops typically buy their stock from distributors every year. If they don't sell it, they're stuck with it -- they can't just send it back because they own it. This is particularly a problem with larger and smaller framed bikes, and it's not uncommon. In fact, if you want to haggle, you could probably get the price down a little more, since the bike has already been entered in the 2000 losses and any money he makes on the sale will be 2002 profit.

The 2000 Pine Mountain appears to be a very well-thought-of bike. Look at the reviews at MTB Review.

[In case you're wondering, I'm mostly a roadie, but I like to hang-out with my muddy, baggy-shorted buddies here in the MTB forum from time to time.