Hmm honestly I might load Yosemite on it and see how it runs with the 3gb of ram and the original HDD.
I've been using my second Windows PC a lot lately, and that thing runs Windows 8.1 pretty well with only 2gb of ram and the stock HDD. Plus that thing is about 2 years older than the Macbook.
So also does anyone have any recommendations for 60-80gb SSDs?
Preferably something that's under $70.
Also what is the newest version of Windows that is supported on this Macbook?
Exactly what I did. I got it in the mail and put Yosemite Public Beta on it with the stock 120GB HDD and 2GB RAM. It actually ran surprisingly well.
Here's the SSD I got for mine, it's pretty cost effective at $59 for 128GB.
As far as BootCamp. Officially, Windows 7 X86. But It's easy to install X64 Windows 7 with admin account and Apple's drivers.
Unofficially, Windows 8.1. Did it on my '08 that was similar to this guy as far as the hardware and chipset goes. Though I had to find each driver individually, and it was rather tedious. I'd just go with Windows 7 though, I prefer it and it's already got support for it.