What do I need to do in order to upgrade my OS properly?

Hardware Overview:

Model Name: iMac

Model Identifier: iMac5,1

Processor Name: Intel Core 2 Duo

Processor Speed: 2 GHz

Number Of Processors: 1

Total Number Of Cores: 2

L2 Cache (per processor): 4 MB

Memory: 1 GB

Bus Speed: 667 MHz

Boot ROM Version: IM51.0090.B09

SMC Version: 1.8f2

We've had this iMac since 2006. We really enjoy everything our iMac have to offer, however we haven't ever upgraded from Tiger since we got the Mac. I don't know why, we just never got around to it. But we really seem to need to now, as a lot of things on our browsers don't run as well, and other issues. We just simply need to upgrade.

I'm not sure if we can upgrade to Lion or not. I guess that's why I am here. Above, I have our hardware specs listed, hopefully that can show you if I can upgrade or not. If Lion is out of the question, is Snow Leopard at least something we can upgrade to? I'm just not really sure what we all need to do at this point. When we upgrade to whichever OS we are upgrading to, do we have to do anything as far as backing up our memory? We have some very improtant stuff on here that we don't want to lose.

And if our iMac is incapable of upgrading OS, I'm sorry but we simply can't afford purchasing another iMac at this time.

Thanks for reading. Hopefully we can upgrade easily.