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........I countered by suggesting that they forget discs, suspension and daft seatposts (for their budget)....
I agree with your overall sentiment, but would suggest a Giant Escape 2:
http://www.giant-bicycles.com/en-gb/bikes/model/2014.giant.escape.2/14980/66557/#overview -
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I was working on a couple of my bikes in the shed yesterday and I found this, tucked away at the back.....
http://www.flickr.com/photos/16282281@N04/6915256520/
Just had to have a little spin around the street on it
Ah, the memories.....
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This might help with (1):
http://sheldonbrown.com/frame-spacing.html
Also this:
http://bicycles.stackexchange.com/questions/8725/100-mm-front-hub-94-mm-fork-dropouts-options
As for (2), you don't quote either the size of the slot in your dropouts or the diameter of the axle in your wheel, so it's difficult to answer your question exactly. What can be said, however, is that it is not unknown to file a 'flat' in the thread on opposite sides of the axle to allow it to fit in the dropout. You could, instead, open up the slot in the dropout with a file but the former is more useful if you don't want to modify your frame. If you do decide to file the frame dropouts, remember to file the lower face, not the upper one. This will ensure the left and right dropouts remain at the same height in relation to each other and the wheel will be straight in the frame.
It took me ages to collect all the brand new parts to build this excellent example. Unfortunately, my eyes are bigger than my garage and I'm just not using it enough to justify keeping it.
Frame is Volume Cutter in purple, seat tube 50cm c-t, top tube 52cm c-c. Fork is Leader reaper fgfs in matte black. Headset is FSA Orbit fully integrated. Stem is Affix BMX hidden bolt and bars are the legendary DMR Wingbar, with ODI Longneck Xl grips. Chainset is by Eighth- Inch with clear bmx pedals and Restraps. KMC Kool chain. Velosolo bolt on fixed cog on the rear hub. NO Freewheel, or the facility to fit one. Gearing is 48/18 which I find fine for brakeless use.
Wheels are something else. Deore hubs laced 3x with black stainless spokes and black brass nipples to Mavic TN719 disc rims. These are super light and super strong XC disc rims with no ugly machined braking surface. This beautiful wheelset was hand built and would cost a small fortune if you were to have something similar built.
Again, to avoid any confusion, the rear hub is a bolt-on fixed cog with no facility for a freewheel!!!
Tyres are Schwalbe Marathon, of course.
Seatpost is a generic alloy one with a DJ saddle.
There is the odd mark (from storage, the bike has hardly been used) but only cosmetic, nothing structural.
Never used in anger, just ridden to work and the shops a few times.
Bike is located near Newcastle, so will post if required.
Looking for £399 plus postage and would rather not split.
Any questions, just ask. I may have missed something.