Yeah - I had a (ahemmm...) Datto 1600 a number of years ago (whil i was rebuilding my first Escort - OK), and it had 25+yo fluid and original rear shoes/cyls. I bled the brakes and amazingly the car stopped 20 times better (Pity the line pressure then simultaneously blew both rear cyls as they had not seen any real pressure in a long time.... the fluid that came out when bleeding looked like water and had "floaties" in it....
Just getting everything working as it should is ALWAYS the first step. Nest step - Upgrade front pads keep adjusting the rear drums manually (assuming you have the later 9" drums not the earlier Mk1 and Early Mk2 8" drums"). For the road and occasional track day - that should do adequately ...
For something a little more serious - then in addition to the previous get some vented front discs either original Capri/Escort ones (requiring no mods and my preference) or other disc such as Laser/BMW etc (which will require modification/machining) and either space out your existing type 16 calipers or use Volvos calipers (my preference). still no mods required to master cyl or rear brakes.
For the very serious (ie full race/track car using brakes very heavily), then larger front discs, and read disc and pedal boxes are required. (In this stage I have only tried rear discs (Alfa discs/Pug 504 calipers) and this really needed a pedal box as the pedal was too low and the bias was too much to the rear)
For rear brakes - you need to work out what you are using the car for.... if keeping the drums then the 3 different sizes dictated how much rear bias you will have. On the autocross car i use the 20.64mm cyls as it gives a great slight rear bias with the standard front discs/M16s on the dirt. For my road and sprint cars I use the 19.05mm rear cyls. The road car has solid front discs and M16s, while the road sprint car has the Capri/Escort vented sicks and Volvo calipers. (interestingly I used to use the 17.85mm cyls on this car when it had the spaced out M16s on the front, but changing to the Volvo calipers gave it a bit more front bias and I can now use the 19.05 (original 2L size) without the rear end skipping under hard braking as the rear springs wound then unwound as there was slightly too much rear bias previously with 2 or 3 "hops" into the old turn one at Winton years ago. Using the 2 pipe master for all the options as I have a suspicion the the later 3 pipe master cyl effects the bias differently.
With the rear disc conversion I tried for a season in autocross a few years ago using the standard M16/solids, I was getting a low pedal (livable on a comp car) but a lot of rear brake bias. Now I do not mind some rear bias (I do drive RWD cars specifically and have set the autocross car to have some rear bias), but the amount of rear bias withe the rear disc conversion was ridiculous.. I was that sideways (90 degrees or sometimes almost backwards) into the next corner that I had to be 200% committed (or commitable)... Autocross tracks in Vic rut up quite often and the best way to roll a car is to go sliding into a corner with too much attitude and fully committed and slide sideways into the rut..... So it came off the car until I got a pedal box to rein it in a little... Still running rear drums 7 years later as they work and have given me not much grief - and if I want to go backwards into a corner there is still the hydraulic handbrake. And this setup works well on bitumen motorkhanas too - note the rear lockup into the finish garage-
http://www.youtube.com/watch?v=nupgKUJ8p9w