hey there Grouch
To do this correctly and safely its going to be a little more work and probably a little more money. You really need to dig up that old conduit and either put in #2 tech (which is a direct barriel wire) or put in the correct size conduit to run your feeder through. Run this from a 100 amp breaker in the main panel to a 100 amp sub panel in your shop. Then run all your new shop circuits from this panel.
You deffinetaly should not use the 1" conduit and run single conductors through it. This would mean that you would have no nutral for a return other than the ground. You should never rely on a ground rod or plate for your neutrals. If you ever become a better source of ground it could mean lights out for you.
As far as gfci breaker go they are not neccecary. If you are concernd about this tho you can use a gfi recepticle for the first plug in each circuit and this will protect all the devices on that circuit. this is alot cheaper then using gfi breakers.
Using aluminum for the main feeders is no problem as long as you use as penetrox to prevent oxidising(spelling?). Aluminum is about half the price of copper so this will save you a big chunk of change. ALuminum should never be used for branch circuits tho.
Hope this helps. Its allways better to do thing the right way instead of cutting corners. Alot safer to.
I would suggest getting a local electrician in if you are unsure on any of this tho. there is only so much that can be done over the Internet.