It really depends on how much you want to spend, and how much you value your time, and the state of the old bike. If it cost you say 2 - 3 thousand dollars to bling up the old bike, you could have a very well setup and personalised bike. Yes its a lot of money, and would likely take a lot of time and effort.
Alternatively, if you sell your old bike and add a few grand to it you might get something thats been setup already for someone else. You might need to spend some more again to then dial it in for you. It might work out the same price, but will be an easier process and you will end up with a newer bike/chasis overall.
Even if you were given a brand new bike for free, you'd still have money to spend. Ie my new 2013R after purchase has cost me rad guards, bar pad, grips, throttle cable, rear sprocket, my choice of tyres, a few jets, pipe guard and head mods. At a guess I'd say I'm already in about a thousand bucks before I even start to consider suspension setup - springs, valving, etc. Thats just to bring my new bike up to my old bikes standard. Sure makes the 'upgrade the old bike' option sound like good value.
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