Wait, PUCHs aren't made in Japan, they are austiran. Made by Austro Daimler (same as Steyr bikes). Weird that it says made in Japan, 'cause they usually weren't.
Definitely see what he means by rear hub takes a fixed gear, if he put an actual fixed hub on it, then yes it's not a bad deal. But if he's thinking of going suicide with the hub, not worth it.
INMO, it's not worth more than $75 by SF standards, especially if all he did was put on a freewheel cog.
Also, make sure the rims are alloy and not steel. Steel is a PITA. Lastly, keep in mind that if you are going fixed you will need clips and staps, plus pedals that can take them. Figure in another $50 for that.
The last thing is that I am 5'10" and I usually don't ride more than a 56cm, but if you have longer legs then maybe your fine. My inseam with shoes on is about 33".
This one will be too big for you:
http://sfbay.craigslist.org/nby/bik/315184984.html
But look for centurion iron man frames. Totally underrated, but good frames. I see they on the cheap a lot. Also, Panasonic is a good one to keep your eye out for.