Originally Posted by JiveTurkey

See here: http://sheldonbrown.com/singlespeed.html

Especially: "The cheapest way to convert a multi-speed bicycle into a singlespeed is to use the original rear hub, assuming that it is made for a conventional threaded freewheel. A single BMX freewheel will thread right on. Unfortunately, the chain line is likely to only work with your granny gear unless you re-space the rear axle and re-dish the wheel."

Having horizontal dropouts will make things easiest.