Is it time to bail on this computer?

My dad gave me his MacBook Pro circa 2006 or so. It has OSX 10.4.11, intel core 2 duo processor and 2 gb of memory. Since it is sort of older I am starting to run into software issues such as being unable to install the latest versions of various programs. There is also some weirdness going on such as my disc utility appears to be gone (I can't open system preferences, so I was advised here to fix my permissions, but alas, no disc utility!)

I guess my question is what would the steps be for getting my computer as up to date as possible and do you helpful folks think it would be worth whatever cost? Thanks ahead of time!

Sounds to me like a reinstall of OSX would be in order.
Just backup your system with TM, and pop in the install disc, press 'C' while booting, and you're
in business.

SM

You can still purchase OSX 10.7 Lion from Apple, its not on the online Apple store but if you phone Apple sales you can still get it, your mac likelly wont run Mountain Lion

As for Disk Utility, it should be in Applications > Utilities

Also, depending on which model you have (mine is similar vintage) you could up the RAM to 6GB. Post your model number and we can give you more specific advice.

Sorry, didn't quite catch the bit of 'upgrading'.

SM