Would upgrading my laptop's hard drive be worth it?

I have a Dell Inspiron B130, which is about 4 years old. The hard drive space is ony 60GB and I find myself constantly running out of room to store my data. I recently upgraded the RAM from 512MB to 2GB which greatly increase it’s computing speed. It’s been a great laptop to me and has had barely any software or hardware problems.

So, I’ve been contemplating installing a new hard drive for it. I’d like at least 500GB’s and any other decent specs with it. My price range is $50 to $100.

Would this be worth it, compared to buying a brand new laptop? What type of hard drive is compatible with my computer? Where should I shop around for one? What else could I do with it to keep it up to date and running smoothly?

Also, would Windows 7 run good on it?