Second off: I'm not restoring anything but function--I'm just painting it.
What you need:
A Bike: Namely a 78' Raleigh Tourist.
Paint stripper. I'm using the not drip, gel stuff. Allegedly easier, better, and smellier.
Filler primer: Spray on primer that claims to fill cracks. My local bike-shop said this stuff is important and hard to screw up.
Primer: Sticks to the filler under-coat, and the paint over-coat.
Paint: I think automotive spray-paint is the way to go, but I've heard other hilarious ideas like "grill paint", and "aviation paint". I'm going with a dark(er?) green.
Gloss coat: Actually important if you're worried about chips (and you should be) or water sticking to it (and you should be). It'll look prettier, which isn't always good, but it's nonetheless important.
Sand-paper, wire-brush (big and small), and
1) Take off everything that can be taken off of the frame. This includes the veritable bottom bracket and the infamous head-set, in addition to the brakes, stem, seat-post, "derailer", etc...
2) Strip that sucker. I used some gel stuff and a paint brush. It was messy and smelly, and took three tries to get 95% of the paint off. One more try might have helped, but I wasn't really in the mood.
3) Filler primer: Now that you've stripped the dirt, rust, paint, and the inner lining of your lungs, you're ready to spray. Just spray the filler-primer on like spray paint. Once it's fully dried, sand it down with low-grit sand-paper. Watch out, I realized after spraying this stuff, that the entire room get a bit of yellow dust on it, which was easily wiped up with a towel.
4) Primer. Same idea, but you don't have to sand it down afterward. I'm going for two coats. Let them dry before applying subsequent coats.
5) Paint. Same as primer, but this time be careful to be even. I used just one coat, per the instructions on the paint can.
6) Gloss: One coat worked for me. And like in all things: be liberal. Interestingly, this dulled the paint a little bit. Oh well.
7) Don't touch it, take it outside, or even assemble the bike much less ride it: you might scratch the paint.
As you can see, it turned out pretty well. There are a few, unpictured, glitches like the the underneath the bottom bracket, and the underside of one of the seat stays. But overall, I'm very happy. Anyone really interested, I used Range Rover's "Highland Green." It's darker than the pictures make it look, but nonetheless pretty.