Ahh, 10.5 and 10.6 wallpapers were so close, the brightness of the picture made it hard to tell
10.5 is basically end of life now. It's not going to see any more patches. Apple tends to support their current OS and the last one only. Moving to at least 10.6 would be a good plan, if not 10.7.
RAM, wherever you normally go for laptop RAM is fine. There is absolutely nothing special about the memory in any Mac, but lots of places like to sell "Mac" memory with a markup. (Well, the one exception is some of the earlier Mac Pros that required specific heatsinks.)
Oh, and regarding dual booting. BootCamp works well, and VMWare Fusion can boot the windows drive into a VM. You end up with the best of both worlds that way, native rebooting if you have to, and the ability to run both side by side, without 2 separate Windows installs. For me, BootCamp is for gaming, though that MacBook probably won't do so well in that regard.