I got an870 20gacombo for my son with the rifled barrel and put a saddle mount on it. Shoots sub3 inch at 100 yds, but the saddle mount is a pain when shifting to birds. Since you have the gun, I'd recommend a cantilever slug barrel with your choice of scope. I and my son both use a bushnell holosight (not cheap but great in the woods, mine's on a Benelli Nova 12ga, with cantilever slug barrel). You can get the remington cantilever barrel with a 2-7 scope installed for about $200. E-bay has had a couple in 20 gage just this last week (actually there is one on there now for $220).

If you do go for a new barrel though, go for the cantilever. By the time you add a saddle mount with a plain rifle sight barrel, the cost is about awash and it's a pain to shift to birds.