Nice bike; I'm with others who say to give it a tuneup and ride the heck out of it.
Well, I'd replace that seat post first, unless you're riding on seriously chunky pavement or have spine issues. There's nothing wrong with a 3x drivetrain, shifting isn't that hard; and if it works I'd keep the derailleur. If you want, you can upgrade parts as they wear out. Some miles in the saddle will tell you what works and what doesn't. Please keep us updated on how it rides and what you decide to do with it!
ETA: Regarding V brakes; they're plenty strong enough; you might want to be a little careful until you get used to them. Kool Stop pads FTW!