To determine if lack of memory is reducing your Pro's performance, go to Activity Monitor, click the System Memory tab at the bottom:
If "page outs" becomes a significant percentage of "page ins" you will benefit from more memory. There is no absolute threshold; if page outs = 20% or so of page ins that's perfectly fine.
When it gets to 100% or more you're out of memory.
PageIns is not a relevant figure nor is PageOuts. What is relevant is what is in the parentheses of PageOuts. For example, in your image PageOuts are 1.5 MB, but in parentheses it says (0 bytes/sec.) The first number is simply the cumulative value since the machine was last booted. The parenthetical value is the instantaneous number. If it's 0 bytes/sec, then there is no memory problem. If it's a positive number that is increasing continuously, then you do not have sufficient RAM and the memory manager is using hard drive virtual memory.
See the following:
About OS X Memory Management and Usage
Understanding top output in the Terminal
The amount of available RAM for applications is the sum of Free RAM and Inactive RAM. This will change as applications are opened and closed or change from active to inactive status. The Swap figure represents an estimate of the total amount of swap space required for VM if used, but does not necessarily indicate the actual size of the existing swap file. If you are really in need of more RAM that would be indicated by how frequently the system uses VM. If you open the Terminal and run the top command at the prompt you will find information reported on Pageins () and Pageouts (). Pageouts () is the important figure. If the value in the parentheses is 0 (zero) then OS X is not making instantaneous use of VM which means you have adequate physical RAM for the system with the applications you have loaded. If the figure in parentheses is running positive and your hard drive is constantly being used (thrashing) then you need more physical RAM.
Adding RAM only makes it possible to run more programs concurrently. It doesn't speed up the computer nor make games run faster. What it can do is prevent the system from having to use disk-based VM when it runs out of RAM because you are trying to run too many applications concurrently or using applications that are extremely RAM dependent. It will improve the performance of applications that run mostly in RAM or when loading programs.
My mac pro is from 2007 and although I have added the new processor over the years, it's gettin too slow.
should i buy a new one or buy memory?
If you are in a position to buy a new one then I would do so, as from reports at some of the more respected Apple related sites are already listing the old Macs which will not be able to be updated to Mountain Lion due to not supporting older Graphic Cards. You could still keep your old Mac Pro as a great old workhorse but it may well pay to check.
You'd need to tell us what kind of things you are doing with the Mac and also how much RAM you currently have.
That said, (and again it depends on if your tasks are processor/memory intensive), I'd wager £120 spent on an SSD means a far greater performance increase in usual everyday tasks, (if there is such a thing), than the same spent on RAM.
2007 is 5 years old, so you should be thinking about a new Mac, especially if you have an alternate use for the current Mac (such as a home server with external bulk storage), or as a gift to someone with fewer computing needs (mail and web surfing perhaps).
If buying a new Mac is not an option, then use Applications -> Utilities -> System Profiler and find out your Mac model number, then go to sites like Crucial.com or MacSales.com (both well respected) and find out how much RAM you can add, and how much it will cost. Max out the amount of RAM you can add.
You might also do some google searching on your Mac model number and find out if it is possible to add more RAM than Apple's specs. For example some Macbook Pros were limited to 4GB, but really could take 6GB, just as some older white Macbooks and older Mac minis were spec'ed at 2GB, but you take 3GB.
Then if you still want more speed, consider gumsie's suggestion and install an SSD (Solid State Disk). You might even be able to remove your DVD drive and put the SSD where the DVD was, and put the DVD in an external enclosure (there are kits for some systems, as well as some services where you can have someone else do it).
With respect to checking out whether your normal usage could benefit from more RAM, I like to start an Applications -> Utilities -> Terminal session, then run the following command
sar -g 60 100
which will tell me the pageouts every minute for 100 minutes. Now just use your Mac as you normally would. After a while go back and look at the terminal session. If your pageout numbers are mostly zero, or very low values, RAM is not an issue. If you sustained pageout values of moderate size, or even larger, then you either need more RAM or you need to stop trying to run too many concurrent apps that are actually trying to do work (idle apps are less of an issue).