The YZ makes a great all around bike. We use a 98 YZ125 for pre-running in Baja all the time, just geared it up. We even left the 19" rear wheel on it. Zero problems, just stay on top of the maint. I don't know about making it street legal, (not an option here in the People's Republic of California). I have been using battery operated HID lights on it.
"Racing is life to those who excel at it. Everything before or after is just waiting."