the maximum you can increase the SATA hdd ( the hard drive) to is 200gb, personally i would recommend just getting an external hd than upgrading the internal hd as its very pricey for the amount of memory you actually get. External you could get like 500gb for £100 ($200,probably cheaper in USA though, if thats where you live) what Brian said was to increase the RAM to 2gb, this will not increase the hd space of your mac but will make it run at maximum speed, this is not necessary unless you are using professional apps like apperture or are running vista/xp via parallels or bootcamp. Again i would recommend an external hard drive.
hope that helps and good luck
jordan