Personally, I do not invest in replacement technology until the current one is absolutely not adecuate. You cannot "foresee" that your macbook will not perform what you need it to do until you put the workload on it. Also if it is now "chugging" maybe you should invest $100 and upgrade the memory if you have not already done so? Also doing an OSX restore from fresh sometimes breathes new life into an old Macbook. But if I was in your shoes I would wait until the last moment. Technology prices go down the longer you wait anyway.
I would think so. Are you willing to throw $200 at it for a new HD and Ram and not feel bad about using that toward a new machine instead.
Let's say you take that $200 you would have used for upgrading...couple that with $600 you would get selling the Macbook on craigslist. You are already $800 toward a $1500 machine. I think you have a solid machine, but I like you, hate throwing money at upgrades to put off an inevitable purchase when you could have just been using that money to buy a new machine. It's a tough decision.