New Toy and it's white

This sweet little machine just made it's way onto my desk here at school. It was sitting upstairs in the drop in lab where the last time someone used it was 2004. So I dusted it off and moved it down to my lab and set it up.

So now I need to know what software is a MUST have and is FREE as the school will not purchase anything for this lone mac machine.

I plan on using it to create digital movies and do some podcasting. But I also want to 'play' with it. It's been a couple years since I've had a mac on my desk so there is a little deep thinking going on trying to remember where things are and that the last OS I really dealt with was 9.5 I think.

It's running OSX 10.2.8 should I upgrade, is there an upgrade? Any and all information would be helpful at this point.