Wow! Still running Jaguar?! Talk about a blast from the past -- you're lucky ANYTHING runs on software that old. To say the least, it's time to upgrade. Moving up to Tiger is a start, but you might want to consider a new machine, as your computer is SLOW! (No offense.)
Your Mac is capable of running Tiger, and it could do it quite well provided you increase the RAM in your machine. You could max it out at 640MB for probably less than $20, which would really speed up your computer. Then go ahead with the Tiger install.
A great website to buy RAM off of is
Crucial. If you wanted to upgrade the computer even further, a larger hard drive would be a good idea. Granted, with all these upgrades, you could just put the money towards a new MacBook.
System requirements, provided by
Apple:
To use Mac OS X 10.4 Tiger, your Macintosh needs:
A PowerPC G3, G4, or G5 processor
Built-in FireWire
At least 256 MB of RAM [note that without more than 256MB of RAM, your computer will run much slower]
DVD drive (DVD-ROM), Combo (CD-RW/DVD-ROM) or SuperDrive (DVD-R) for installation
At least 3 GB of free disk space; 4 GB if you install the XCode 2 Developer Tools