You have enough room for a new OS.
Some updates are problematic and you will need to do some to bring it unto date after the install.
Print this so that you can refer to it during the process.
Dig out the grey install disks or use a retail version of Snow Leopard 10.6..
Insert the DVD and restart your Mac, press and hold the Option key.This opens the Startup Manager, looks like this.
One of the choices will be the DVD, select it and press the right arrow.
Click continue at the Language screen, next is Welcome.
Here there will be a menu bar with Utilities, select Disk utility and you will get this.
Then repair the drive.
Do both, if it does its job then all is good, if it says it fails for some reason you have two choices. One, replace the hard drive (keep it or back it up) or, two, buy Disk Warrior ($100) to repair it but the drive will probably need replacing anyway later).
Once that is done successfully quit Disk Warrior to return to the installer and click Continue, select your hard drive and have it install a new OS X, do not erase and install or all data will be lost.
It will do its thing, once done repair permissions again and run Software update, keep running it until it runs out of updates and repair permissions one more time.
Now your Mac should run like new again.
You will have a folder on the hard drive called Previous Systems, once all is as it should be you can trash that and reclaim lots of drive space..
Read that carefully before proceeding.
This will help explain what will happen.
If you have questions about this please ask. Print this or write it where you can refer to it.
Let me know.