I did something similar this year. I have a Trek 720 which I bought, say, in 1990. It was simply a hybrid, straight bars like a mountain bike, but narrower tires, no suspension. I rode that bike everywhere, for every purpose. After several years it ended up on the trainer. Then last year, after reading this board, I realized "Hey, I've got a nice steel mixte sitting here!" I took it to the shop and had it fixed up with a new cassette, derailleur, shifters, brake levers, and maybe some cables. I rode it home in the snow (carefully, it still had the slick "trainer tire" on the back) and had so much fun. When the road cleared I took it out again and I just felt sticking my legs out and yelling "wheeeee!"

I think it came to about $200 US, using just basic parts. It was fun to give some life back to the bike.