Your model can only upgrade to Lion (10.7) if it is a 4,1 - see specs here:
http://www.everymac.com/ultimate-mac-lookup/?search_keywords=MacBook4,1
What model camera do you have? It may be the older version of iPhoto, but, it can also be the camera model not being supported. Here are the search parameters digital camera models which are supported:
Apple - Support - Search
You'll note that the first one is Mountain Lion; way down on the list is Snow leopard (10.6); I do not remember if RAW images were even supported in 10.5 at all.
According to your machine specs, you could easily upgrade to Snow leopard, but if your camera is newer, it may not be supported in the (no longer supported) Snow leopard.
After checking all these, post back with your camera model and how you wish to proceed.
Edit: Leonie, you beat me to it.......