Yes, you will have to pay income taxes on the conversion. I know it is tough to pay another tax bill, but it is hard to imagine a future tax rate of lower than 12% (if that is where you are at). And depending on your state tax laws, you may or may not have to pay state income taxes. But maybe not.
But building up a nice size Roth IRA, and knowing ALL of that money won't ever be subject to income taxes, is really nice. I sure wish Roth IRAs existing back when I was starting to invest (I am 61).
As a side note, a good investment strategy for Roth IRAs is to put the investments you expect to grow the most in your Roth, e.g. stocks. The reason is, you want as much tax-free growth as possible in the Roth. This is how I manage my clients investment accounts whenever possible. So it is one more incentive to convert your money to a Roth if you have a portfolio of stocks and bonds in various accounts.
