BIOS updates usually fix bugs, or (more commonly) add support for newer chipsets, newer CPUs, and so forth. If you're running okay as-is you probably don't need to update the BIOS.
RAM: 1GB is decent. 2 GB is better, but also more expensive. If you've got 1 GB I say keep it for now. If you absolutely MUST spend $120 on another GB of ram, do so. Try to get the same RAM as you already have, the same speed (i.e. PC3200) and the same timings if you can. That way you can run them in dual channel mode.