I painted the downstairs bathroom this morning with the Kilz primer and I think it will do the trick on the mold issue. We then went to the Lowe's and looked a bit at some different flooring options. Our idea is that it will be a temporary kitchen renovation - basically just updating the look of things until we can afford a major (read: expensive) renovation. So painting the cabinets makes sense. We've been struggling with the idea of painting them but it made me feel better to see that many of the original kitchen cabinets in the 1920s were also painted.
I think the next big decision will be what we do with the ceiling. When Thom peeked up under the dropped tile ceiling a couple months ago, we saw that they had knocked down all the plaster on the ceiling so we either will have to put up drywall or we can put in one of the newer dropped ceilings that have the faux tin ceiling look. We'd then have to figure out what to do about lighting so I can get rid of the godawful fluorescent light in there.