How do I find what graphics driver is installed, and how would I update same?

The graphics driver is part of OS X. If you wish to find a later version then upgrade OS X.

Upgrading to Mountain Lion

To upgrade to Mountain Lion you must have Snow Leopard 10.6.8 or Lion installed. Purchase a redemption code at the Online Apple Store: OS X Mountain Lion. Mountain Lion is $19.99 plus tax. Use the code to redeem a download of Mountain Lion from the App Store. The file is quite large, over 4 GBs, so allow some time to download. It would be preferable to use Ethernet because it is nearly four times faster than wireless.

OS X Mountain Lion - System Requirements

Macs that can be upgraded to OS X Mountain Lion

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?

See App Compatibility Table - RoaringApps.

Upgrading to Yosemite

You can upgrade to Yosemite from Lion or directly from Snow Leopard. Yosemite can be downloaded from the Mac App Store for FREE.

Upgrading to Yosemite

To upgrade to Yosemite you must have Snow Leopard 10.6.8 or Lion installed. Download Yosemite from the App Store. Sign in using your Apple ID. Yosemite is free. 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.

OS X Mavericks/Yosemite- System Requirements

Macs that can be upgraded to OS X Yosemite

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?

See App Compatibility Table - RoaringApps.

You cannot upgrade VRAM. The amount available to the integrated GPU depends on how much RAM is installed. Your computer's specs should spell that out for you. PS may need more buffer memory, not VRAM, which is configured in one oh its preferences.