. . . Hi; max OSX supported on the 1181 is 'Lion' 10.7.x (what you already have) . . . http://support.apple.com/kb/ht5444
The hassle with these old macbooks is the GPU, they are likely to be 32bit EFI as well.
Suggest you fit more RAM, an SSD (ideally an Angelbird one with TRIM support), and enjoy running Lion.