I've got a 1.33 Ghz 12" Powerbook that I upgraded with more RAM and a new 100 GB 7200 Seagate Momentus Drive (replacing the stock 4200 RPM 60 GB Hitachi I had in there). I went with the Seagate over the Hitachi because I read that the Seagate was much quieter, seems very quiet to me in operation too!
The upgrade has helped alot (boot up and application starts are much faster) and totalled maybe $200. The online instructions for replacing the hard drive are critical, and it's not that hard, just need to go slow and take your time. I screwed up and made the mistake of using some needle nose pliers to disconnect the microphone plug from the logic board and ended up accidentally pulling out a wire (ack!)... dead microphone, which I never used any way, but still, go slow! I used a ice cube tray to keep track of all the screws.
Given that you have a 1Ghz machine, if you have some money to spend you may consider doing a
processor upgrade to 1.67Ghz. Right now they're selling for $359. If Apple doesn't come out with another small laptop in the next year I may consider doing that myself. By the way, I think you can buy other upgrades from Daystar along with the processor and they'll install them for you (you need to ship your computer in to get the processor upgrade).