Whether to sell or upgrade is your call, but:
Start by checking if you can run Snow Leopard:
Requirements for OS X 10.6 'Snow Leopard'
OS 10.6 Snow Leopard is once again available for $19.99 from the Apple Store:
and in the UK:
but nobody knows for how long it will be available.
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 at least to Lion, but some functions are only available in Mountain Lion:
You can also purchase the code to use to download Lion (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: