I've got an 870 express that I'd love to put a pistol grip stock on and possibly change the barrel and add a mag extension.  It's a smooth bore, so would a rifled barrel do better or should i stay with the smooth bore and just have a good set of sights added onto it?  Also, which pistol grip stock would you recommend?

http://www.ar15.com/forums/topic.html?b=6&f=1&t=179361
http://www.knoxx.com/NewStyleKnoxx/Products/SpecOpsStock.html

Stick with a smooth bore.
Rifled shotgun barrels are for Sabot slugs ONLY.

Would a choke tube be a good thing, or would that make it shot only?

If you're talking pistol grip only and no butt stock, you're probably making a big mistake. Stuff like that looks good in the movies, but doesn't work well in real life. The one major exception is if you're using the shotgun for breaching doors/locks.

I'd go with a good hi vis follower, quality mag extension, and maybe wilson/scattergun tech sights (PSI has some nice looking sights too) and a jumbo head safety. If you can get a fiber optic front with ghost ring rear, I think you'd have a great sight setup.

If you have a standard sporting-type 870 you'll need a few things:
-The shortest barrel you can get with RemChoke capability is their 20 inch "deer barrel" (smooth bore and rifle sights)
-Get a good quality +3 (8 round) extension tube...  I like the Choate models.
-For the psitol grip, I recommend the Knoxx SpecOps (AWESOME!!!) or the SpeedFeed IV.  It depends on whether or not you want to have an adjustable stock.
-Get a tactical/police forend (Again, I like the Choate) or a Surefire weaponlight forend...  I recommend the Surefire but you can get that at a later time.
-If you want a choke tube my tactical shotgun instructor during my law enforcement training swore by Patternmaster tubes.  He did several demonstartions with various tubes and the rsults were pretty impressive.  Following his advice, I have a Buckshot model on mine.
All in all, you are gonna end up dropping about $350 - $450 on the above items (depending on the deals you can get).  You may want to look into buying a NEW Remington 870 Tactical as I have seen them going for around $400 - $450.
I chose to upgrade an 870 because:
-I wanted to have 3.5 inch Super Magnum capability (870 Tactical is only 2 3/4 and/or 3 inch)
-I wante dto be able to use choke tubes (the 870 Tactical is not RemChoke)
-I hate the Olive Drab finish of the 870 Tactical
-I wanted the Surefire forend (I would have had to add this to any new gun anyway)
-I still can use the old parts to bring it back to retro and use it for birds

I'm not planning on a grip only, that would be CRAZY.  Where would be a good place for me to send my barrel or purchase a new barrel that will accept choke tubes and have rifle sights.

To use the choke tubes you'll have to get a genuine Reminton barrel.  I couldn't find anyone to do the work for me so I bout the above mentioned barrel.  Here is the part number from Remington: 24549.  I found mine brand-new in the box for $149 shipped.  I believe you can also order from Cabela's but they charge $200 (?).  This could really cost you a bit of money, my friend.  I have about $600 into mine, which is about $150-200 more than it is worth  BUT I have exactly want I want and nothing less.