If it ain't broke don't fix it. That being said, I would replace the parts that are recommended to be replaced for regular maintenance such as the dampers/orings, maintenance station, sponges and wiper. Other than that I would clean up as much ink as possible, check and clean the encoder strip and disk, check the speed reduction belts and grease the rails.
If it has been sitting for a while, you may have to change the head and that is when I would start thinking about trading in for a new machine. The 1204 is an easy machine to keep running and/or revive from the dead. It's all about how much you are willing to spend.