I just went from 1G to 2G on my 15" PowerBook and i have noticed a big jump im speed...less "spinning beach ball" and my progs runnin smoother...but a bigger CPU like was said above has its definite advantages...
Depends wildly on what you've got and what you're doing.
If you're trying to work in Tiger doing anything more than basic word processing with 256MB RAM, then adding more RAM is definitely going to be the bigger boost. If you've already got a gig of RAM and don't do heavy photoshop or video work, then more RAM probably won't do you any noticable good (if you're not even using everything you've already got) but the CPU will make a difference.
It's also as Mitthrawnuruodo said; some things care more about RAM, some things CPU.
Basically, due to how cheap RAM is, I'd say start by looking at the cost of at least a gig of RAM (or more, depending on what you do--Photoshop CS2 under Tiger, for example, LOVES RAM), and only then start looking at whether you can afford more CPU.