Yes, OWC is very good...highly recommended my many folks here.
It's hard to say what the better upgrade would be, as it depends on where the bottleneck is for your system. Are you running out of hard drive space or do you expect to in the near future? If so, get the new hard drive. (What do you have in there now?) Or does your system feel sluggish? Then get the RAM. 2 GB is a good amount for a portable in this day and age, but if you use RAM-intensive apps, you could see a nice benefit by bumping it up.