STX Derailleur on 9 speed cassette

I happened to acquire a Shimano LX 9 speed cassette and have gotten the
upgrade bug for my 1998 Trek 6000 mountain bike.

Here's the current rear setup on my bike:
7 speed cassette on 7 speed Freehub
Shimano Parralax hub
STX rear derailleur
7 speed shifter (Alivio or Acera, I think)

Now, as I see it, there's two options for me:

1) I can do the "8 of 9 on 7" upgrade talked about at Sheldon Brown's
site. This would require me to swap out my current shifter and
cassette, however, I could keep my freehub and avoid the redishing. For
an explanation, see http://www.sheldonbrown.com/k7.html#up7

2) My other option is to replace the Freehub and put all of the 9 speed
cassette on. This would require me to purchase a Freehub at least, and
redish the wheel. I am wondering if my STX derailleur will have enough
reach for the 32T of the new cassette.

Either situation is going to require me to buy a new chain, but the less
I have to purchase, the happier my wife will be. I already have the
rear shifter, as my front shifter broke last year and the only shifters
I could find in a pinch were new LX shifters.

What are your suggestions and thought on these two options?
Have many folks tried the "8 of 9 on 7," and are they happy with it?

Thanks in advance,
Brad Kattelmann
http://brainfuzz.net