So the conference that I am going to present a paper is going to publish a book of abstracts. Is this considered the proceedings of the conference? Or can I still grab my paper and send to a peer reviewed publication?
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You can still send it to a peer reviewed publication, and should. Conferences in my field (planning) are often used as a mechanism to obtain feedback on a draft paper. I'm aware of no example where 'conference proceedings' count against re-publication. My whole department submits papers for presentation to the Transportation Research Board (TRB), which then creates a compedium of the whole paper, and distributes it by CD. This is not considered publication, and most/many of the papers submitted to TRB are then revamped and published elsewhere. (TRB does cream off a limited number of papers to be published, formally, in the Transportation Research Record).
Someone from your specific field should confirm this, but in general, submitting to a journal should not be a problem. However, do not use the same title, so that indexing/search issues don't crop up later. Similarly, you may like to modify the abstract a bit so that the two are not identical (which they shouldn't be anyway, the journal paper would typically be an extended/more detailed study).