I have an old Contender pistol that I could convert to a 204 Ruger rifle for about $370. What sort of accuracy can one expect from the rifle? What type of gunsmithing work would improve accuracy of the rifle? Would the project be a waste of money?

I'll try to answer your questions the way I see it. First ...the accuracy one could expect from a Contender is dependent on the quality of the barrel, ammo and shooter just like any other gun. Assuming you have the best quality in those things a Contender can shoot very, very well. I have a 6mm 30-30 Contender that will shoot sub MOA with very little trouble. It has a custom barrel, handloaded ammo,good scope and a half ass shooter behind it.
In a .204 I would expect less than 1" groups of three at a hundred yards. The beauty of the Contender concept is that other than buying the best quality barrels with a hanger bar foreend very little gunsmithing would ever be needed. Most Contenders have excellent triggers, lock up very tight and are chambered in calibers that seem to be designed for that style of gun. Curious..... where you getting the barrel ? If you buy one and it doesn't meet your accuracy standards ....let me know I will relieve you of that burden.

Thanks SKB2706. The barrel,wood stock and forearm are made by TC which can be orderd from Midsouth. Who makes a quality barrel and what is a hanger bar forend? Is there a web site for TC Contender fans? I have a 14 inch 22LR and a 7MMTCU barrels. One of which I have in the pickup when going bird hunting in case I see a varmint out of shotgun range.

Bullberry Barrel Works of Hurricane, UT makes a high quality barrel with a hangerbar system. www.bullberry.com