Keep the heater. Maybe the filter will work too if you clean it out and put some new media in. If you want to plant it, just switch the light bulb (no need to do away with the whole fixture as far as I know) because I don't think plants are affected by actinic bulbs (thats what you use on coral, I think). You should go for a nano planted tank! And just because I love nanos, here are some stocking options:
-Betta (but you already know that)
-Endlers livebearers and dwarf cories
-Clown killies or some other type of killie
-A Sparkling gourami, a small school of microrasboras and a few bottom feeders (possibly a few Dwarf Chain Loaches?)
-Dwarf puffers and some ottos
There is a really good nanofish list floating around some forums, but I'm probably not allowed to link to it
Sidenote: Your SW Pico translates a FW Nano (b/c a FW Micro would just be ridiculously small!!!). What is with all these terms anyways lol.