I've got an older, about 1991, model Cannondale SM1000 mountain bike purchased new. Would it be worth it to convert to disk brakes and if so what would be the process?
Adding a front disk brake:
Financially feasible? Probably not.
Worth doing? Only as a learning experience - don't expect it to turn out as good as a modern bike.
Your bike is 25 years old, and as such it will be a product of its time. The fork will not have mountings for disk calipers, so you're up for welding some on, or replacing the fork.
If you weld, hopefully its a rigid fork because welding anything onto a suspension fork is incredibly hard, plus the risk of damaging the suspension.
Replacing the fork is easier, but you're going to need a 1" threaded MTB fork with disk mounts.
If all the other parts swap over unmodified, you're very lucky.
Do you have any emotional attachment to the old canoodle ? Modifying it can be a bad idea and spoil your connection with the old bike.
I suggest you price up a new fork, wheel, caliper (both cable and hydraulic) rotor and see what the total parts cost is for both sorts. Then go try some new bikes in a real shop, and calculate the difference in price. You can even subtract whatever you'd get for selling the old bike, or revel in becoming a cyclist whose N value is now 2.
Just remember rule 12 (http://www.velominati.com/the-rules/#12)
If you can get the parts for nothing, then by all means its a good project. However it'll never be modern - instead its mutton dressed as lamb.
Thanks to a comment from OJS I realised I hadn't picked up that you wanted to look at converting both brakes.
Answer Yes its possible to fit a back disk brake to a non-disk bike. But.....
Refer to this question's answers Disc brakes on leader doberman which has no tabs and adaptors but there are adapters to provide caliper mounting holes.
Downside is they will stress your rear triangle in ways for which it was never designed, so you may wreck your frame slowly over time, or abruptly on a fast hard brake.
Second point is that rear brakes are much less effective than front ones, so his makes the cost/benefit ratio is even worse than the front brake.
You need a new hub with rotor mounts. It will have a freehub so you're up for a cassette now. Add a new chain and deraileur, and a new shifter because you're probably being forced to 8 speed on the rear, maybe 9 depending on availability.
The width of this hub will be wider than the old one, so your frame needs spreading, and given its an aluminium frame, this is a really bad idea. I doubt a frame builder would look at this either, its not worth the risk of buggering up the alloy frame and inducing weaknesses.
You need to buy the rotor and caliper. It would be silly to reuse your wires, so new inners and outers. I don't know if a new brake lever is required.
TL;DR, don't bother, buy a new bike. It'll be cheaper. Sell the old one to offset the costs, or keep it as the spare/hack, or give it to someone who doesn't have a bike.
I have coped with the same problem, regarding a GT XCR 4000 mountain bike frame, but as far as it goes, I have resorted to leave the bike with V-Brakes. These are my reasons and concerns to leave it this way.
Budget: At the time of build the non disk hubs and the V-brakes had a cost of roughly one quarter of the disk compatible hubs, rotors and cable actuated calipers. Also replacement parts for maintenance are far cheaper (Brake pads, cable and cable housing)
Weight: The bike is already very heavy, specially compared to the body weight of the user. Mid range disk brake components are heavier than mid range V-brake components.
Bike use: The bike is ridden in light duty cross country trails, by a user that weights less than 120 lbs, and there is no water or mud in most of the trails it is ridden.
Installation on the frame: This bike has a fork that is compatible with both, V-brakes and disk brakes, the frame, however, has no provision for disk brakes. At the time of build (and yet several years after), there where no adaptors that seemed to be dependable, but all of them added too much weight.
Welding tabs was considered, but I did not knew of any local shop that could weld aluminium, but even it existed, I was worried that the seat or chain stays where not sturdy enough, and that the welding could weaken them. Also,the rear triangle would need to be repainted.
In my experience, good V-brake, with proper maintenance are good enough for light duty XC riding. My own bike, is a 1999 Diamondback X2, I weigh 150-180 pounds, and I use v-brakes on it, with aluminium rims even though I ride a more aggressive style of XC.
My trick is to periodically wash the pads and rims with kitchen soap and scrubbing pad. Every 12 or 18 months I change the cables and housings (I use a single piece of housing for the rear brake to avoid dirt collection).
With this maintenance schedule, if my brakes are still capable of locking the wheels or allow me to perform a controlled stoppie, then that's enough for me.
Sure V-brakes degrade in wet weather, but also tire grip decreases, so the lighter braking force helps me negotiate on tricky slippery descents. (Disk brakes won't stop you any faster if the tire slips).
I have tried a wide variety of low end to mid range v-brakes, either brand-name and generic, (Levers, brake arms and brake pads). Also, have tried Hayes hydraulic disk brakes, Tektro and Avid cable Disk brakes. All of them have their limits.
I currently have disk brakes only in my DH bike (yes, I'm also a DH rider), that's where I really need them and where I get the most benefit from them. For XC and urban bikes I really prefer V-Brakes as I find them lighter, cheaper, dependable and easy to maintain and repair (specially on the go).
I'm by no means stating that V's are better than disks, my point is that the benefit you get, largely depends on the riding style.
My conclusion for this answer, is in the same line that Criggie's: The upgrade path for a bike that has no provision for disk brakes is to swap the fork, and the front wheel (or re-lacing with a disk compatible hub).
The front brake is the most critical one, the rear one is simply not capable of delivering as much braking force as the front, so a bike with disk brake in front, V-brake in rear is a god compromise.
If dirt/water/mud is not a concern and the bike is kept in a dry place, cable rust won't be a problem, so a mechanical caliper can keep conversion cost down, as they are compatible with V-brake levers. This also allows you to keep both levers the same (if that matters). Good hydraulic disk brakes, on the other hand, can provide years of service requiring no more maintenance than brake pad swap and rotor cleaning.