Here are my thoughts. Instead of swapping for 700c wheels and tires, you might be able to get away with swapping tires and tubes for skinny 26" road tires. For a couple of years I ran Forté Fast City K 26x1.25 tires on my geared MTN bike, and they were great, they really transformed the ride! I think their replacement model is the Metro K. Don't forget that you'll need matching tubes if you go that route. Doing that will save you from having to buy rims and brakes in addition to tires and tubes. Just remove the derailleurs, shifters, rear cassette and install a single cog and some spacers on the rear wheel. If the frame has horizontal dropouts, that's great, just swap the chain for a single-speed unit (SRAM PC-1 works well), otherwise you'll need some sort of chain tensioner, like a Surly Singulator. Performance Bike also has a kit including the spacers and the tensioner. It might be worth investigating. The nice thing about using a cog and spacers is that you'll have some flexibility in adjusting the chain line to your liking, the downside is that it's not a flip-flop setup, just single-speed.