Laptop RAM upgrade

[TheJubilantMale]

I bought my laptop, a compaq nx7010 , in late 2004. Been debating for a while whether to buy a new one or just upgrade it. Settled on the latter. The link will show you some of the specs of the laptop.

What I want to upgrade is my 55gig hard drive and my 256mb RAM.

Max amount of RAM is 2 gig. Should i go for that, or would 1 gig be enough?

Are there any compability issues when it comes to upgrading ram and HD I need to know?

What will the effect of not upgrading the rest of the machine be. A ferrari motor in an old ford?

Other thoughts or input on this?