Keep upgrading, or save for a new Mac?

I have a MacBook 3,1 that I got in early 2008 with 80GB, a 2GHz Intel Core 2 Duo processor, and I recently installed 4GB of RAM on my machine. The RAM has greatly improved my system's performance, and now that leads me to my question:
Should I consider upgrading this machine a bit more by installing Lion (I'm running Snow Leopard now), getting more hard drive space, and buying a magic trackpad (for the gestures), or would that money be better spent going towards a new MacBook Pro? If I figure conservatively, that would run me an additional $300 give or take.
What limitations would I have running Lion on this older machine? I'd like to squeeze another two years out of it if possible, but I don't want to do it at the risk of performance and general frustration from a laggy machine.
I don't do anything too intensive on my computer, just basic internet surfing and college paper writing. I might open up a music notation software or a game here and there, but I spend maybe 2% of my time in these programs.
Any advice?

It's not a mis-scan. Apple officially states that it can support up to 4gb, however, it can actually accomidate 6gb according to mactracker as seen here:
Regarding the remaining 30gb of HDD space, I can not anticipate on how much storage you may use over the next few years (and Im sure you have no way of knowing either ) I see various posts here claiming that you should keep somewhere around 15% of your hard drive free (although others here say that's not true, and to be honest, I am still looking for an explaination on which is correct). Here is an excellent vendor of hard drives, so you can get an idea of prices:http://eshop.macsales.com/shop/hard-drives/2.5-Notebook/. 80 gb is a rather small hard drive these days. I bought a 240gb for a pc laptop I own for like $45, so upgrading the HDD is not a bad option. If you like Lion and its features, no reason not to upgrade, that's a fine reason . Just be aware that some applications you have may no longer work with Lion. Apple switched from PowerPC processors to intel processors in 2006, and created the Rosetta emulator so companies would have time to update software to run on intel processors. Rosetta was discontinued with the release of Lion. Check this list to make sure any apps you have are still supported: http://roaringapps.com/apps:table

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Read this, it will explain it: http://support.apple.com/kb/HT4905
Mac mini (Mid 2011), MacBook Air (Mid 2011): Use Lion Recovery instead of OS X Lion USB Thumb Drive
Last Modified: September 01, 2011
Article: HT4905
Summary
Learn about using Lion Recovery or the built-in OS X Lion recovery partition rather than OS X Lion USB Thumb Drive with computers released after OS X Lion.
Products Affected
MacBook Air (13-inch, Mid 2011), MacBook Air (11-inch, Mid 2011), MacBook Air (Mid 2011), Mac mini (Mid 2011)
Use Lion Recovery to restore Mac computers released after OS X Lion. If you attempt to use the OS X Lion USB Thumb Drive, a message will appear stating that you cannot install this version of OS X on your computer. This is correct behavior to make sure you install only the correct and most up-to-date version of Mac OS X on your computer.
Note: You can also use the Lion Recovery Disk Assistant on your Mac to create a bootable image to make sure you recover the correct version of OS X Lion. To use the Lion Recovery Disk Assistant, you need to have your own USB drive.
Additional Information
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How many depends on how elaborate and complex your work is. Simple documentary films with the odd effects, transitions, titles, and grading.. you'd be fine with a 6-core IMO. If you're leaning towards getting into really layered comps and effects, you'd shorten those long render times down a lot with the 8-core. As for memory, I'd recommend at least 4GB per physical core.
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Keep upgrading, or save for a new Mac?

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