I upgraded my new MacBook to 4GB of RAM and a 320G 7200 RPM drive, which I purchased from Other World Computing. The speedup is dramatic, since it was constantly thrashing with only 2G of RAM when I had 2 large applications open (like Aperture + Photoshop, or anything else with Parallels).
Replacing the hard drive in the MacBook is very easy – you just have to open the battery compartment and remove a single screw. The most difficult part is dealing with the 4 mounting screws on the side of the drive which hold it in place. They’re nearly impossible to remove from the old drive. Luckily I was able to find 4 screws that were exactly the right size. Unfortunately the screws still attached to the old drive prevented it from being mounted properly in the external case.
Replacing RAM is a bit more involved, since you have to remove 8 screws and the entire bottom of the case. It isn’t too difficult to open, and the RAM is easily accessible and very easy to replace once you get it open.
I highly recommend doing upgrades like this in two phases. First, I replaced the RAM, put everything back together, started up, and verified that the RAM was good. For the second phase, I replaced the hard drive. I then connected the old drive in an external case and used Carbon Copy Cloner to restore the contents to the new internal drive.
I’ve posted a full photo gallery of the upgrade here.