natness

Hi all- I'm new. New to Subarus and new to these boards. I just bought a 1995 Impreza wagon with AWD and manual transmission, 1.8 engine, 84,000 miles. I've never had an AWD vehicle OR a stick... I bought the car even though I couldn't drive it-- shows you how much I loved it. (I've learned to drive it in the last couple days... woo-hoo!) Anyway, I bought it from a private seller who appeared to maintain it regularly-- all receipts, timing belt changed, oil changes. The tires don't match; the rear tires match each other (50% tread remaining) but the front tires (both relatively new) don't match anything. I took it to my mechanic before I bought it. He said it needed a new exhaust from the cat back, new rear struts, valve gasket covers and 4 new tires. I also think it has some AC issues. (By the way-- my mechanic said even with these problems his gut feeling was that it was a good car... wouldn't have bought it if he didn't.) OK, so here is where the questions come in. I have $1,100 dollars to fix the car. (I managed to talk the seller down pretty far armed with my mechanics report.) How should I prioritize these repairs? Can I wait on any of these without damaging the car? I intend on driving this car forever if I can. I would like to do anything I can to help it on the gas mileage (prices here in Chicago are 2.22$ a gallon!) and I've heard picking the right exhaust system can help this. I also know the tires have got to be a major issue with the AWD system. I've been having trouble finding tires in the 175/70/14 size that have good consumer reviews. Does anyone have tires this size they are happy with and can recommend? I need ones that are pretty tough since Chicago streets are often filled with nails and/or snow. Are there any other 'known' problems with this model or my circumstances that I should watch out for? Sorry to be such a chatterbox. I'm excited about this car (first car I've ever owned that I acually LIKE) and I want to do everything right. Thanks in advance, Natalie