Should work very well, after all a crisp new paint job always looks better than old and faded colours.
For replacing stickers, you can stick on the old ones, or alternatively you can look up some companies (eBay has a few) on the web to make up some waterproof decals to whatever design you send them (a scanned Super Soaker sticker, or a pic of the web for example) and simply stick them on the side of the blaster.
Mods and/or repairs are much more common, and plenty of info is available on that.
I'm currently doing something similar myself, with a CPS 1500. At the minute it's simply repair and restoration (other than some detailing), but it will lead into some discreet mods. I've got loads of pics of that, with more on the way, so I might have something specific you might want a look at, especially with the trigger valve and nozzle areas.
Some useful links:
Paint and Refresh
Re-applying Stickers
SSCentral Repairs
SSCentral Mods
WWn Wiki Repairs
WWn Wiki Mods
(The WWn Wiki is still quite small, in the repair and mods sections especially, but there are some relevant pages, such as the cosmetic mods page)
