IPhone not updating due to lack of iTunes and Mac OSX update

Hello,
I have an iPhone 3GS running software version 4.1 and am needing to update it to the next version. When I click on the 'update' button when the phone is connected to my MacBook, a window pops up that says 'This version of iTunes (9.2.1) is the current version'. I realize that iTunes needs to be updated as well, but in order to do that I need a different version of Mac OSX. I have an older MacBook and am currently running Mac OSX 10.4.11
My question is: is the only way to update my iPhone at this point to purchase the OSX Leopard 10.5? I seem to be caught in a dilemna of not having the most up-to-date software on my computer, but I wish it didn't effect my iPhone performance.
Any information would be helpful. Thank you!

You can upgrade the MacBook directly to Snow Leopard for $29.00
<http://store.apple.com/us/product/MACOS_XSNGL>

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