Actually, this is what Photoshop was made for - working with photos to correct things like color balance and contrast (two problems I see with this photo). Over the years, Adobe has added many neat special effects options with the filters, masks, blending modes, etc.. Some of those new features will help here. The Healing and Clone tools can be used to get rid of all of those water spots and scratches. Combinations of blending modes and certain filters can help to sharpen and clarify the image.
Here's a tut on getting rid of spots -
http://www.picturecorrect.com/photos...storations.htm
Here's another. Go here and click Tutorial -
http://www.cell.com.hk/
I hate to say it, but here are all you ever need -
http://www.google.com/search?q=photo...=&start=0&sa=N
Photoshop - it's not just for sigs, anymore.