Buying a Used Bicycle: Help Wanted

Despite the lion-like way in which March is going out, I do believe that Spring is upon us. Spring is a time when certain urges are known to take hold, and I am feeling one of those particular urges quite strongly at the moment. That's right: I want to ride a bicycle.

I've found a local used bike for sale, and the price looks right, but I'm none too sure I know enough to make any judgments on its quality or style or suitability towards me, so perhaps you can help. Here's a picture:


From what I can tell, its a Dyno. The bike is described as being in good condition, 26" tires, summer usage, the back tire is a little bigger because the original tire was blown out and replaced, it has grip shift gears, shocks on the front forks and under the seat, gel seat and U-lock included. Originally $350, he's now asking $125.

In terms of size, he is 6'6" while I'm 5'9", though he says that shouldn't be a problem since he hunched over and the seat can still be adjusted. I'd be trying it out for size, anyway. I'd just like to know if anyone knows enough to say whether this is a decent deal at all. I'd like to be able to ride back and forth across town in it for work to avoid the bus and get in shape.

Advice welcome!