How do I update my iMac OSx if I have an old version 10.5.8.

I'm interested in the iCloud and it requires the latest OSx.  I think I have leopard (not positive as it was 4+years ago-version 10.5.8).  I've not had any problems witht the system and runs great for my family's needs.   To get iCloud, it said that I had to have the latest OSx.  I'm also interested in AirPlay as well and suspect that this may require an update as well.  I looked into updating the OSx and it stated that to update to Mountain Lion it requires at least Lion or Snow Leopard.  Do I need to update each step of the way or is there a way to bypass the versions in between.  Is it worth doing if I have to pay for all the updates (vs updating the whole computer)?  Thanks for any help.

iCloud's minimum requirements are a Mac running Lion v10.7.2.
Lion's requirements:
        Mac computer with an Intel Core 2 Duo, Core i3, Core i5, Core i7, or Xeon processor
        2GB of memory
        OS X v10.6.6 or later (v10.6.8 recommended)
        7GB of available space
To view this information on your Mac, click the Apple icon top left corner of your screen. From the drop down menu click:  About This Mac
To see if your Mac can upgrade to Mountain Lion, see Step 1 here >  Apple - Upgrade your Mac to OS X Mountain Lion.
Information regarding AirPlay > Using AirPlay
A must read before upgrading to Lion >  Lion upgrade questions: Apple Support Communities

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