QUOTE
Is Lion an upgrade from Leopard or a new system
It's the latest version of OS X, so it's an upgrade to everything earlier. However, at the present time, there are only three ways to get Lion:
1. Download it from the App Store.A. That app needs at least Snow Leopard (10.6) to run, so you may have to upgrade to SL before buy Lion. Fortunately, neither upgrade is mandatory but it, effectively doubles the price of Lion. Of course, Snow Leopard, itself, is great and stable!
B. You should have a fairly fast Internet connection.
2. Take the computer to an Apple Store.
3. Buy a 'new' Mac. Even the Apple Refurbs will have at least Snow Leopard and you can upgrade to Lion for free. And their refurbs have the normal 1yr and are eligible for the 3 year Applecare.
This link has the info explaining what you need and how to upgrade to Lion, should you decide to do that. Frankly, if money is tight, I'd spend it on a RAM upgrade. No matter what OS you run, it will be better with more RAM. OTOH, SL is only $30 and then you can get Lion for just another $30.
But don't forget to check what apps you use now that have
not been updated to run on Lion. That should mainly be
PPC apps (open System Profiler, select Applications and you'll see a list of apps and one column will show what cpu it uses), very few of those still being maintained. And the majority of apps will run with Snow Leopard, even PPC ones.