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>Are we looking at a re-write of the
>application or is it at all possible to go through a relatively short
>conversion process with the existing code which we can then take to add
>new flourishes and features more consistent with todays technology.
If you need to add some of new technologies you should add some classes - communication - fax, e-mail, SMS; Export to - PDF, HTML,XML, XSL, DOC,....; RTF control and Picture controls for formating text and modifing images.
This require in most of the cases some framework and OOP expereince

>In essence, we are looking for a short term solution to take care of some
>obvious requests (e.g. most persistent is to move away from a character
>based DOS application to a windows based GUI application) as we pursue a
>more extreme overhaul of the product over the long term.
If you like to gain from Pageframes, Grids,Combos to avoid many screens like in DOS you shoud rewrite everiting. Data acces to SQLServer and.... lead to the same.
You can with investing in one full rewrite to save more money than in cosmetic direct conversion from FP->VFP

>Any advice or recommendations you may provide is greatly appreciated.

As outsourcing center we pile more than 20 conversions of legacy systems and my personal advice is FULL REWRITE using GOOD FRAMEWORK. Good framework is framework, which fully fit to your needs, not best advertized. Usually for every application we create its own frameowrk on the base of our main one.
HTH