There are several ways of doing that. Others will suggest different methods but mine is to use an application called SyncTwoFolders (it's even free!):
http://synctwofolders.en.softonic.com/mac
and regularly make an updated copy of the entire Pictures Folder to two different external hard drives each having separate partitions for plain old storage - I have even more photos than you!
BTW I don't use time machine. I regularly clone my entire hard drive to other partitions on those two 2TB external hard drives using SuperDuper.
As for upgrading to Mountain Lion:
To use iCloud you have to upgrade at least to Lion, but some functions are only available in Mountain Lion:
http://support.apple.com/kb/HT4759
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:
http://www.apple.com/osx/specs/