Singlespeed conversions of this type are relatively cheap. I converted an old Bridgestone MB-5 to a single speed by taking off the rear cog cluster, and replacing it with a bmx cog that fits on a Shimano cassette ($6 @ LBS) along with a stack of cassette spacers (free from LBS). I don't recommend using an old cog from your cassette cluster, because they have bevelled teeth that are designed to ease shifting -- not desirable with a single speed. The next step was to remove the derailleurs, shifters and cables; remove the inner and middle chainring, and replace the chainring bolts with shorter ones ($6 @ LBS). I shortened the chain as much as possible to reduce the risk of derailment, adjusted the chainline, and adjusted the derailleur set screws. I ended up with a 42:18 gearing, which is quite pleasant for tooling around town. It's not the prettiest looking single speed, but with a total investment of $12, I can't really complain.