Each major upgrade to OS X costs money - you can go to Tiger, or you might be able to pick up a legit copy of Panther on eBay. Any legal copy of Panther will automatically upgrade to the last version (10.3.9) via Software Update.
If you're talking an iBook, it's like most notebooks and kind of hard to upgrade hardware wise - not to mention the cost. You might be able to find a recent version, Apple factory refurb from Apple with same warranty as new for about $800. They usually can be found at Apple.com. clcik on Store and scroll down ring to Special deals. Then scroll through the refurbs until you get iBook.
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