Well in my case I wanted a bassier humbucker sound on my bridge pickup so I decided only to swap the bridge pickup and just leave the other ones as standard for now since I'm just going to be using that one. I managed to get the Kent Armstrong one from Total Guitar on ebay for about £20. It depends on what sound you want. In the case if the seymour duncan one you might just have so sand round the edges of the pickup hole to let the pickup fit in properly. If you want to buy some cheap bits and pieces you could try http://www.highlystrung.co.uk I've recently bought some new knobs and switch covers for a couple of my guitars and they offered a good service.
I'd have to disagree with hrckid about spending £200+ on a new guitar straight away. Even if you go and buy a decent guitar right away it will still sound pretty lame being played though a low cost fender practise amp. So then your going to have to buy a better amp which is going to cost more money. In my opinion as long as Amadeus feels happy playing the squire and it feels right and stays in tune I think he would be better keeping it for now. In my opinion its always good to keep a low cost guitar like this for experimenting with. I own a couple of expensive guitars (including a JS90HAM, JS1000 special edition) and I know I'd think twice about experimenting with swapping pickups etc on something worth so much money. Plus I know from experience that if you try and get sell a Squire guitar your going to lose so much money its better just to keep it!
But thats just my opinion :)
Disco
