In reply to 2pints: Depends. Does it have disc mounts? If so, I would set about upgrading it gradually rather than a new bike. New forks to start with, assuming it'll take 1 1/8th headset/steerer. Then a bit later you might want to upgrade to disc brakes, which will require new wheels. But for now, just new forks will make a world of difference.
I did the same with my (slightly less retro) Kona. I replaced the cappy RS Jetts with pimping Fox Talas. Rode it for a year, got proper keen, and then replaced the whole bike except the forks with an Orange P7 frame and various other bling.
Best way to go IMHO if you think you might be keen, but not keen to shell out on a new bike. crikey that took longer to write than I expected. Now off to wash to blood and mud from my knees after a great day on the Mendips...