I am trying to restore my dad's Diamondback Sorreto so I can join a bike club in town. His brakes are really shot, and my question is, can I replace candelever brakes with v-brakes?

Possible, but not advisable. V brakes need more cable pull, so use special brake levers. If you change the levers as well you will have no problems. Unless the levers use an integrated gear changer, then you will have to ensure compatability of modern 9-speed changers with your x-speed system.

Its rare for quality alloy cantelevers to stop working. Maybe they just need a bit of simple maintainance and adjustment.

brakes
 

You can use V brakes! They manufacture a device that goes at the end of one arm that enables the use of canti levers with V brakes. If the bike has a front suspesion fork you will definately need this. Most of the time for cantis to fail they either bend or the springs are shot. Take the brakes off clean the studs that they bolt to and grease them. Bolt the brakes back on and grease the bolt. Replace the pads, and clean the rims where the brake pads contact. You can clean them with rubbing alchohol, or hot soapy water. Another little trick is to take the pads and push in as much post in the brake as you can they should have lines on the posts. Put the posts on the last line so that you have alot more post going toward the wheel. You should have a minimal amount left on the other side of the brake. Then adjust the straddle hanger to fit. This will make the canti's more sensitive to react.

Thanks.

The problem with my cantelevers is with the springs I think. When we got the bike there were these grey plastic coverings over the springs. Well, one of the plastic pieces on the front brake came off. And from then on the front brakes started to lean to the left (when looking straight at the bike, also the side the plastic piece broke off) and didn't work anymore. When I looked closer at the brakes to see why they weren't working, I found the the plastic pieces have little screws that adjust the spring tension(I think).Is this possibly why my brakes are messed up?

Brakes
 

Yes those pieces of plastic actually hold the spring from moving out of round when engaged. If they are broke the performance is hindered. You can still pick up good canti's for alot less than the V brake conversion especially if the shifters are a part of the brake levers.

The problem with your brakes can probably be easily fixed, usually new springs or the adustment sleeves etc. can be found if you need them. You may only need to remount the damaged side and readjust the brakes using the screws you mentioned. You might even have the wheel in the bike off center, (I've been guilty of that one).

Rebuild the cantilevers. For starters, the pads are cheaper. You can tend to find them at the bike shops or even places like Target or even Kmart(just wear a disquise). As for the retro fit option mentioned above, this could cause stress on the frame that was not anticipate on earlier models like that.

Thanks guys!!!
I found a new set of canti's for 15 bucks, that is alot cheaper than any v-brakes I found.

Toss the original shimano pads in the bin ,if the bin will accept them(lol), and get yourself some koolstop pads ,they are of a softer compound and as a consequence a lot more braking power also saving your rims braking surface ! .