Adding a larger hard drive is very easy and hard drives are cheap. Chances are you have a 2.5" form factor that spins at 5400rpm. If the computer is older than 2 years it will be IDE, if it is a year old it will be SATA, if it is in the middle it might be either. There is no limit to the size of HD you can install provided it is the correct form factor. It also gives you the chance to reinstall Windows from scratch which will usually speed the computer up as many of the old unneeded programs don't get reinstalled.
As far as the RAM goes the amount you can use is limited by a combination of how much your mother board can address and how much your OS can see. Crucial is a great resource but isn't cheap. If you use them to figure out the correct RAM for your computer make sure to get the same voltage and timing and not only the same speed. If you can get your laptop apart enough to get the make and model of the mother board you can usually go to their site and get a list of approved RAM.