I have a Macbook with 2GB RAM and a 100GB 7200 rpm HDD (now for sale on eBay, actually) and, yes, it does make a huge difference.
Launching of apps and general startup/shutdown times are much, much quicker. I wouldn't want to go back to a 4200 or 5400rpm drive...
As for battery life, I can't say I've noticed any difference. The batter lasts plenty long enough to watch a full DVD so all's good, in my opinion.
To sum up: money well spent, I reckon.
Cheers,
Steve.