To repaint a bicycle, you have to have the time, talent, energy, and desire to totally disassemble the bike and rebuild it completely. If you have not done it, I can tell you it is a LOT of work. It is a true labor of love.
If you do it, I would suggest having it powder coated. I have heard of guys having it done for as little as $60.00 including sandblasting the paint and rust off. Of course, color choices would be limited, but it would sure be worth it both from a cost, time, effort, and durability standpoint. In fact, if you can find a place to sandblast the frame for $25.00 or so, absolutely do that and then paint it yourself if you don't want to powdercoat.
Painting the bike yourself will cost you around $50.00 including the chemicals and materials to strip the bike, sand it, prime it, and paint it with hardware-store grade automotive paint.
If you strip it, use a strong commercial stripper. Forget the environmentally safe stripper. That crap doesn't work. No wonder it is environmentally safe - it's $18.00/gallon jello.
Anyway, strip off the paint with the stripper and steel wool. Next, you have to get the rust off. You can try using Brillo pads. That might do the trick. Then, you might consider using rust converter on the rusted areas.
Rinse the bike in solvent to clean. Allow to dry, and coat with a good sandable primer. Sand, and re-coat until the rust blemishes are gone.
Wash with dishsoap and rinse, allow to dry, and then paint. GOOD LUCK! If there is any grease or oil or other mystery particulate on the surface to be painted, you will get a halo effect where the paint is repelled from the surface. GOD that is maddening. Spray painting is an art. You have to keep the can moving and about ten inches from the surface. Practice on junk first until you get the hang of it. Nothing is worse than going through all that work and then have your paint job run and sag.
Give the bike at least three good coats. Five is better. That will take all of three full sized cans of spray paint. Do not give it clear coat. Clear coat might lift the base paint and ruin your work.
Decorate your bike with decals or pinstriping.
Ride you bike on it's post-paint maiden voyage to your favorite coffee shop or library. Return home and find scratches on your new paint job. Swear to yourself that you will never go through that again.
Cheers. Good luck. Let us know how it goes.