"Should I..." and "Is it worth it..." are subjective, and are entirely and solely up to you. No one knows you better than you, and no one can answer those questions but you. Ask yourself if the differences between Tiger and Leopard are justifiable. Ask yourself if $130 is worth it. Ask yourself what you intend to gain from upgrading to Leopard. Ask yourself if Time Machine is worth it.
Go to an Apple store and play with Leopard... like it? Got $130? Buy it. Don't have $130? Don't like it? Don't buy it.
No one but you can answer those questions.
Yes, your machine will handle Leopard as long as you've got enough RAM (I recommend at LEAST 1GB, if not 2GB).