Is it possible to replace a 1 1/8 steering tube with a 1"? I have a 94 Giant ATX. Threaded 1 inch steeering tube.

I need a shorter stem, and would also like to install a suspension fork.

Is it doable? Could I take a modern suspension fork, heat the crown, smash the steering tube out, install a 1" tube (with some added metal so that the outer diameter is 1" 1/8) the get rid of the threaded headset and install a threadless 1" headset (does it even exist?)

Bear in mind that I'm in Argentina, and it's very difficult to get parts from US shops.
I'm going to recommend that you NOT do this.

There were in the past manufacturers of 1" steerer suspension forks - though I'm not certain that they're are still sold. It is important to note that bicycle frames built to accept solid steel forks have different geometry than those built for suspension forks. The frame is designed for a fork that doesn't have suspension travel - the head tube is taller, the down tube and top tube are welded to preserve the set geometry of the bike. Installing a suspension fork would lift the front of the frame up and slacken the head tube angles - overall, I suppose it isn't a huge deal...HOWEVER...

If you're having a hard time finding bike parts, will finding a 1" steerer tube, a suspension fork that has a brazed steerer tube, a bushing that is machined to fit precisely and a machinist to make your bushing, and someone to braze this all together be any easier than finding a more modern bike frame or a used 1" suspension fork?

You might be able to remove the steerer from the suspension fork if it is brazed in, but retrofitting a new steerer tube will require a bushing machined to VERY precise tolerances to allow for heat expansion and brazing filler flow. Any valves, adjusters, stanchion caps...anything not brazed or welded to the fork crown will have to be removed to prevent any damage while heating. You'll want this done professionally because a failure while riding would be regrettable. 

With the amount of work involved, it may be more cost effective to track down a mountain bike frame with a 1-1/8" suspension-ready head tube or just have someone replace the head tube in your existing frame.

Also, it may not be too difficult to find an affordable bicycle in Argentina. Here is the distributor for Giant bikes in Argentina. You can email them at: info@giant-bicycles.com.ar. You can locate Giant vendors by province here. If Giant is represented there, you'll likely find other companies and reputable bike shops who can order you frames, parts, bikes, you name it.

Added info:

Here is a forum thread detailing fork building. The most important point is the fit of the steerer to the crown. If it is too tight, the brazing filler won't flow evenly and consistently, too loose and the integrity of the braze is compromised. If you do decide to do this, definitely try it more than once. The first two or three you should cut up to inspect the brazing filler flow (cut lengthwise and try to pull the pieces apart. Bubbles, seams, and burnt flux are all signs of a poor joint.) There is a comment about brake bolts and wedges being used to prevent steerers from pulling out of the crown, but I wouldn't risk it.