You can upgrade the hard drive; buy any SATA drive and have it installed by an Apple Authorized repair place (CompUSA does it for $30, doing it yourself is hard and will void your warranty). Newegg.com has a lot of drive options for reasonable prices; I prefer Seagate because they come wiht a 5 year warranty. Current prices are $86 for 250GB, $110 for 300GB, and $255 for 400GB.
Sorry, the VRAM cannot be upgraded.