Walt, I'm proud to say the Kismet (in the first picture above) is slowly going through the transition you discuss. No, I won't change out the engines or wiring, but pretty much everything else either has been (or is in the process of being) modernized. Electronics, a/v equipment, appliances, cameras, heads, bowthruster, galley, pilothouse, flybridge, furnishings, searchlight, radios, etc, etc.
This winter, we're refinishing all exterior teak (and uncovering some that was Awlgripped over many moons ago), as well as repairing every exterior crack, split and blemish. She'll look great come springtime and we'll be proud to show her off at OpSail 2012 this summer!
Definitely a labor of love, but the classic LRC's deserve it and fortunately garner a lot of respect at every port.