To update to Mac OS X 10.7, Lion, you must have an Intel Core 2 Duo, i3, i5, i7, or Xeon processor...click the apple left side of the menu bar, About This Mac and see what processor you have.
If you have an Intel Core 2 Duo or better, you can call i-800-MY-APPLE and purchase the download code for Lion ($20) and they will send an email in a few days with the code and instructions.
Upgrading from Snow Leopard to Lion or Mavericks
To upgrade to Mavericks you must have Snow Leopard 10.6.8, Lion, or Mountain Lion installed. Purchase and download Mavericks (Free) from the App Store. Sign in using your Apple ID. The file is quite large, over 5 GBs, so allow some time to download. It would be preferable to use Ethernet because it is nearly four times faster than wireless.
Macs that can be upgraded to OS X Mavericks
1. iMac (Mid 2007 or newer) — Model Identifier 7,1 or later
2. MacBook (Late 2008 Aluminum, or Early 2009 or newer) —
Model Identifier 5,1 or later
3. MacBook Pro (Mid/Late 2007 or newer) — Model Identifier 3,1 or later
4. MacBook Air (Late 2008 or newer) — Model Identifier 2,1 or later
5. Mac mini (Early 2009 or newer) — Model Identifier 3,1 or later
6. Mac Pro (Early 2008 or newer) — Model Identifier 3,1 or later
7. Xserve (Early 2009) — Model Identifier 3,1 or later
To find the model identifier open System Profiler in the Utilities folder. It's displayed in the panel on the right.
Are my applications compatible?
Upgrading to Lion
If your computer does not meet the requirements to install Mavericks, it may still meet the requirements to install Lion.
You can purchase Lion at the Online Apple Store. The cost is $19.99 (as it was before) plus tax. It's a download. You will get an email containing a redemption code that you then use at the Mac App Store to download Lion. Save a copy of that installer to your Downloads folder because the installer deletes itself at the end of the installation.
Lion System Requirements
1. Mac computer with an Intel Core 2 Duo, Core i3, Core i5, Core i7,
or Xeon processor
2. 2GB of memory
3. OS X v10.6.6 or later (v10.6.8 recommended)
4. 7GB of available space
5. Some features require an Apple ID; terms apply.
Get more information about your computer. Go to the Apple in the upper left corner of any window, then "About This Mac". Write down what it says about "version"and report that here. Now continue to "More Info..." Copy and paste the information here, but omit the serial number and Hardware UUID (if present).
System requirements for OS X Lion and Mac OS X v10.6 - http://support.apple.com/kb/HT4949
Snow Leopard is a great OS - fully featured and stable and secure. Unless you have some reason to upgrade, I suggest you stay with what you've got.
Certainly do not upgrade to Mavericks without first doing some research on the features and abilities that will be lost (many) versus those you will gain (few). And make a backup or two beforehand.