I also recently got this very same bike (for $160 but high milleage) and it's a great bike. Although I upgraded a bunch of parts (wheels, v-brake conversion, tiagra long derailleeur, seat) I only did so because I had them in my parts bin and the originals were worn. But if I had this bike in good condition and I had to pay to buy parts I would not do any upgrades as there are no glaring deficiencies in the factory parts. Sure, lighter wheels would be nice, and 11 or 12spd, and disc brakes (it has the mounts on the frame) etc etc but pretty soon you've dumped some serious $ into an old bike.
The only upgrade I would do is gearing and tires (if they are somewhat worn). I replaced the 12-25 cassette with a 12-34 to make hill climbing easier and no regrets but note you may need a longer derailleur and new chain too.