That CPU should actually be fine for most things. RAM as mentioned is huge for laptops because the hard drives that come in laptops are no where near as fast as their desktop brothers. When you don't have a lot of RAM the operating system needs to create 'virtual' memory by using the hard drive thus a HUGE slow down.
So really your upgrade options would be hard drive and RAM. And I don't know if I'd bother buying a new hard drive for that particular laptop, esp when you will find maxing out its RAM to be cheaper and more productive.
