If you're wanting a decent paint job, you really need to put some $$$ into it. If you just want a "10 foot" paint job (looks great from 10 feet away) then keep the original paint as much as you can, just lightly sand/wire brush it with care to avoid getting to bare metal, and first and foremost, make sure to spend time on the prep! It doesn't matter if you spend a ton on good paint if you don't get it prepped. If you have rust, remove that, still try to keep most of the original paint since most of it is pretty decent baked on, you're not going to duplicate that with rattle can, so just "feather" the high spots, and since removing rust means going to bare metal, and this is going to be a bike you want to keep a while, get a good automotive metal etching primer.
Also, make sure that all the paint you use is compatible, using all the same brand is the best way to be sure, mixing the wrong types/brands can turn any paint job into a nightmare. I have sold bikes with just a "10 foot" paint job for top dollar, so it doesn't have to be perfect, just take the time to do the several light coats (using a light colored primer makes it easy to judge this, no need to get the solid color in the first coat, better to make it 3-4 coats and sand it between with something like 600grit wet dry paper).
I don't have any personal experience with powder coating, but I have been impressed with just a decent rattle can job that I have seen others do (I'm more of the 10ft paint job type) and just remember, if this is a bike that will go off-road or do a good deal of commuting, no paint job is immune to rock chips, so for me a cheap paint job is the answer since most of my bikes will see a lot of use.
The last time I did an expensive paint job (painted my first motorcycle with expensive epoxy fuel resistant paint) it still got discolored when I had some idiot insist on filling my bike for me and splashed crap all over it!!
So it's really about how much you want to spend, and what kind of abuse it will see.
Thanks for the insight on what to use in the desert dogman, that makes sense, I might consider a little different paint for some of my touring bike now knowing how hard the sun will be on clear coat!