You have two choices to upgrade to Snow Leopard.
1. You can go directly to Snow Leopard by just purchasing the OS upgrade for $29.
2. You can purchase the box set which includes SL + applications for $129
See
http://store.apple.com/us/product/MC573Z/A?fnode=MTY1NDAzOA&mco=MTM3NDgwNjU
To see if your current apps will work in SL, go to A Mac OS X 10.6 Snow Leopard Application Compatibility List is here
http://snowleopard.wikidot.com/
When you upgrade the OS, do it via Archive & Install. See
About the Archive and Install feature
http://support.apple.com/kb/HT1710
Be sure to select Preserve Users & Settings. Also, repair permissions before and after the install.
Cheers, Tom 😉