Photoshop CS issues on Mac Mini PowerPC G4 (1.2)
General information before we get to the crux of the question: "PowerPC" means you're not on Intel. 7 gigs free hard drive space is getting close to insufficient, but I usually don't have problems until I get less than 4-5 gigs. You may want to get an external hard drive and move some of your data files over there to free up space. 

At 1 gig of RAM, you should probably look into upgrading that. I would expect the machine would work with two gigs, more would be pushing it. iFixit has very complete instructions of how to disassemble and reassemble nearly all Macs.

Your processor speed is high enough that you can upgrade to Leopard (10.5), but that may not actually improve much for you. For starters, if you upgrade to Leopard, you will no longer be able to run programs in Classic (Mac OS 9). If this is important, don't upgrade the OS. Also, I doubt an OS upgrade will make it easier to run Netflix and other online videos, as that is more of a hardware thing: Netflix, for instance, requires an Intel Mac. (I just tried it on my iBook G4 1.33 GHz, a fairly similar machine to yours, running 10.5 and got the system requirements page instead of the video. Netflix requires Microsoft's Silverlight which requires an Intel processor, so that's never going to work.)