Request for Comment - late 2008 MacBook as starter Mac
From your description, this is a MacBook4,1 or MacBook4,2. They both have the same compatibility, and are essentially the same machine for considering the future:


That MacBook will run Lion once the RAM is upgraded. It will not run Mountain Lion. Today's Mac mini would. The MacBook4,1 and 4,2 have less than a month before it becomes unsupported by the next OS. The Mac Mini probably has several years.
Macs are not generally user maintainable. (Edit: To be clear, I mean to the degree that you're used to.) The RAM in that model is user upgradable. I believe it's just three screws in the battery compartment.
You will need Lion for the current version of Xcode. In a month or two, you'll probably need Mountain Lion for the latest Xcode. Apple may ship the next Xcode with compatibility with Lion (say, 40% odds), but certainly next+1 won't be compatible.


Sources:


OS X Mountain Lion (Wikipedia)
MacBook Model Specifications (Wikipedia)