Are older road bike parts compatible with newer standards? How do older and newer bikes match up performance wise? I'm a big mountain biker and looking to get into road biking.  However, I don't want to drop $1,500 on a new or relatively new road bike without being sure I'd want to stick with it.  Anyway, I found an old 1974 men's Schwinn Varsity 10 speed road bike on Craigslist for about $100 and I'm not sure of a few things:

First, I'd like to upgrade a few parts on the bike if I do buy it, e.g.: clipless pedals, possibly a drivetrain overhaul, etc.  The only thing I'm not informed of is compatibility.

Second of all, I really have no idea how a bike this old would match up to a bike from the last 5 years or so.  I'd be riding with people from my local bike shop and I wouldn't want to have a tough time keeping up because of shortcomings in my ride.  Obviously a newer bike is better, but does the difference really matter if I'm not doing the Tour de France?
Upgrading an older bike is typically not economical.  Parts are typically not cheaper.  Parts are not as available.  That drivetrain is not compatible with a modern bike.  Bikes have gotten better.  Little faster, lighter, more comfortable, and easier to service.  You can find decent to nice newer model used bikes for $400.  Find someone that bought an $800 bike thinking they were going to get healthy, did not ride it, and is selling it for $400.  It happens and that is your best value.