Like Doctor X said, your next "upgrade" step is a paid upgrade. 10.3.9 is as far as you can go for free -- 10.4 costs money. It's free up to 10.4.11 -- then, 10.5 is another paid upgrade.
You can skip upgrades -- one can go from 10.3 directly to 10.5, skipping 10.4 totally.
10.5 requires an 867MHz processor, which you lack.