So ive got a 97 Korean Squier Strat. Bought it for about £30. Its never had a set up, goes out of tune a lot, sounds kinda crap and weedy when i plug into an amp. The neck seems fine though.

I have a vision of spending a bit of money on it, replacing the nut, the tuners and bridge eventually moving on to replace the electrics and pick ups and even give it a new paint job. Overall i may well be spending up to £400 on it for parts and labour (over the course of a couple of years)

Has anyone had any experience of doing this before? Is it worth it or am i just putting lipstick on a pig, so to speak. Would the money spend on upgrades be better of spent on a new guitar, say a MiM Strat?

it depends on what you want the end result to be. If you want to mod a guitar, go ahead and mod it. If you just want the end result to be a better guitar, then save up and buy a new one. Keep in mind that there will be a learning curve with modding it, especially if you decide to paint.