Sandra,
I would keep the down tube shifters.....nice touch, and nice levers.
Lose the hideous plastic puffy saddle. Yuk.
I would put some beautiful Albatross handlebars on that bike- with a nice Nitto Technomic stem to go with them. Then it would look a bit like this:
http://www.rivbike.com/images/produc...E_SIDEVIEW.jpg

Here is the stem and bars I mentioned:
http://www.rivbike.com/products/list...stems_and_tape
They sell the baskets too.

Nice bike, I hope it fits! Nice cherry color!