Wow, wouldn't this be a nice project, and am guessing done right eventually a good investment. If it was mine, I would essentially make it liveable at first. Repair what needed to be repaired, essentially keeping what was there, but if it needed replacing, doing so. A lot of cleaning would be involved and a good lick of paint at the end to make it fresh. Then down the track doing a complete renovation.
Update - Sold for $780k.
And now next door is up for auction - here. (It was sold in 2009 for $672k here)
For price guides I went looking and found the below. Yes they are 2013 and 2012 prices, but given the state of the property and the market we are in, I think that is what it would go for. Lets wait and see shall we.
1 Gipps St, Paddington - Sold for $760,000
20 Rose Terrace Paddington - Sold $720,000
195 Underwood Street Paddington - Sold for $767,000
2 Hargrave Lane Paddington - Sold for $790,000