Hi Nadine If the wood of the windows rails, stiles and muntins are in good shape then by all means I would redo them.
The best way is to cut the old sash cords, seal the pulley holes, remove the window sashes and install an aluminum (or now available in vinyl) spring loaded window track system, available through most window speacialty stores. However, this requires a bit of wood working skill (window sash outer guides must be routed out and the sash edges may have to be planed to fit the new guides).
If you don't want to (or can't) do this, then I'd suggest removing the sashes and reworking them on your work bench (A B&D 425 work-rmate will work well here). First, I'd remove the glass by cutting/digging out the old glazing compound and tapping the panes out. Then I'd strip off the old paint using a heat gun and a contour scraper (available from most paint stores or Home Depot). If the sashes or muntins are loose, you will have to pry apart slightly and poke some all-weather yellow glue into the joints and clamp. Then lightly sand, prime and apply two coats of a good exterior grade paint. Then reinstall the glass and reapply glazing compound. If the counterweight cords are no longer attached, you can simply make a propup stick to hold the windows open when you want to keep them open. Ok, this will seem a bit funky....but it works! (smile).
Hope this helps a bit. It is a bit of work, but the results will look nice and it sure is a whole bunch less expensive then installing new windows!! :-)