I currently have a 7 speed STX-RC hub that I want to upgrade to 9 speed. I am thinking that i can do it for under $150.

I figure I need:
1. Cassette 11-34
2. Shifter Grip shift
3. 9 speed Hub Body
4. 9 speed Chain

I know that I should use a longer axle, but I am pretty sure I can make it work with the one I have.

Anything I am missing?

I think that will most likely work.

Stupid Question: a 9 speed chain will work on 7 speed chainrings, right?

I have two bikes with nine speed hubs "downgraded" to seven speed because I prefer it. You can make it work, but I'm not sure it's worth it. I think that for most types of riding, seven is pleanty.

i agree that 7 is plenty, but I really like the options of a 9 speed. I would like a 34t in the rear, but I think spending the $$$ on a 7 speed casette with a 34 is a waste, not to mention they are hard to find.