running 10.5.8 can I upgrade to leopard then lion if software update says up to date.

If you're using a PowerPC iMac, it can't be upgraded further.

If you're using an Intel iMac, phone the online Apple Store and order a Mac OS X 10.6 DVD.

(70994)

Start by checking if you can run Snow Leopard:

Requirements for OS X 10.6 'Snow Leopard'

http://support.apple.com/kb/SP575

Whilst Apple have withdrawn Snow Leopard from their stores, you can still get it from Apple by calling 1-800-MY-APPLE (if you are in the USA) and they will supply the SL DVD for $20 for a single user, or $30 for a family pack that covers up to 5 Macs. You can also purchase the code to use to download Lion from the same number (Lion requires an Intel-based Mac with a Core 2 Duo, i3, i5, i7 or Xeon processor and 2GB of RAM, running the latest version of Snow Leopard), or you can purchase Mountain Lion from the App Store - if you can run that:

http://www.apple.com/osx/specs/

If you are outside the US call your national Apple Helpline:

http://support.apple.com/kb/HE57

If you're in the UK, use this number: 0871 508 4400

When you have installed it, run Software Update to download and install the latest updates for Snow Leopard.

To use iCloud you have to upgrade all the way to Mountain Lion:

http://support.apple.com/kb/HT4759