Which Groupset?

Anyone have any experience with putting modern 10/11 speed gruppos on older steel frames with 126 rear spacing? I want to keep the frame if possible but then kit it out and money is not so much an issue as I get a very good discount. I'm open to suggestions. Is this a complete waste of time as I should just get a new bike?

Two things:

1. if your rear spacing is 126, you should be able to get a 130 spaced wheel in there with some effort.

2. I remember reading (I think on sheldon brown) that 11 spd is not such a good idea if you do the above, as the chain may rub the frame in the smallest sprocket.. May be wrong about that.

I'm > | < this close to converting my Merckx (126mm rear) from 7 spd shimano to 10 speed Veloce..