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What kind of speed are you wanting to get? The Craigslist bike is great if you want something that looks nice and functions fairly well, but you'll be limited on your top speed with it as-is. Definitely go with some kind of lithium battery for it or any other ebike. Lead acid was a necessary evil back then, no reason to suffer with it today.
I built my ebike to be more of an electric motorcycle with pedals than an electric assisted bike. Top speed of ~32MPH on flat ground (I limited it to ~28MPH), bare minimum 20 miles of real range (not the "20 miles of you pedaling and going 10MPH" range). $300 for the conversion kit, $650 for the high quality 48v 15Ah LiFePO4 battery, $100-200 for misc parts (different tires, connectors), and I believe my wife's hardtail mountain bike was $350. Motor and bike have almost 1000 miles and the battery has over 1600 miles. Biggest issue with both bikes was thorns in the tires, but Slime in the tubes pretty much eliminated the thorn flats.
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