I'd say it's definitely worth it. The graphics have been continually updates by people through the years. See the HQ Mods or the 10th Anniversary Patch. I, personally, have been working on getting the FFB up to (my) modern standards. Tonnes and tonnes of mods here on RD and elsewhere on the web.
Check out some recent Billy Strange GTR2 videos for an idea of what you'd be getting into.
Can't speak for playing with a controller. It's great fun with a wheel I'd totally recommend getting any wheel to start. Start with a G27/G29 if you're not sure about it.
I'd recommend purchasing it as part of the SimBin Mega Bundle available in many places as you'll get GTR1 and Race 07 plus a whole bunch of addons to give you a lot of content to play through.