i used rustoleum's "Rust Reformer" primer to base coat everything that was steel. I should have sandblasted or stripped the seat pan, but was so eager to get working on it that i just used sandpaper. it did an acceptable job, but if i ever do it again it's getting taken to bare metal everywhere - results are much better that way.
after the rustoleum primer, i used DupliColor automotive paint (in a rattle can) to paint things. i did also use the DupliColor clearcoat on the pan after painting, and it came out really nice.
i had wanted to powdercoat my frame, but had budget limits, so i just sanded the rusty spots and primed with the rustoleum, and actually just masked the engine off and used satin black rustoleum to touch up the frame. it seemed to closely match the factory paint -- it's nowhere near great, but it's better than being half-brown from surface rust, and from 5 feet there are no noticeable flaws.
i've heard good things about POR15, and was considering that for mine. i guess the advantage of paint is that if it scratches you can repaint the scratch, then sand and polish the new paint and you're back to good.
my advice is to just go slow, take lots of pics, and consult the service manual before you start taking stuff apart. my biggest (and funniest) problem was that even though i was REALLY organized about bagging everything, i didn't know the technical names for all the parts, and so my labeling was rather... creative... and when i started rebuilding it, i would think "top box mounting bolts?!?! WTF am i talking about?" haha. you're going to be amazed at how much intimate knowledge you have about your bike by the time you're done with this project
just work within your budget and do the best job you can. my rebuild has probably $1200 into it - $300 for tires/tubes/installation, $375 for pipes, and the rest is in $5-25 items -- spraycans, cleaners, polishes, rags, etc etc.
if you want any tips on cleaning anything, let me know. i think i hand-polished every square inch of my bike, and learned some helpful shortcuts along the way.