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(This is a follow-up to How to improve old, slow iMac -- new SSD? Or more RAM?)

I replaced the HD on our old 2008 iMac 8,1 with an SSD, and it seems much faster. However, it was running 10.9; now it's on 10.7.4 (which was already on the SSD.)

Should I install 10.9 like the App Store suggests? Or keep the version at 10.7.4?

It only has 3GB of RAM.

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I am of the opinion that you should keep your O/S up to date unless you have a SPECIFIC reason to stay at an earlier version. E.G. incompatible software that you MUST run or a noted incompatibility with a service that you can't do without (EG some people are still having issues with MS Exchange compatibility in mail.app on Mavericks).

So, your computer has enough RAM (more RAM if possible) and a nice fast SSD so I would go with the Mavericks install... IMHO

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I do have the same iMac as you.

I believe Snow Leopard is the fastest system you can install in your iMac though its not supported by Apple anymore.

I did the upgrade to 10.9 and I felt the system slower, but, I did that because some softwares required the upgrade to run.

When Yosemite came your, I gave it a try. I made a fresh install and, at beginning everything appeared to be normal. But I felt the system VERY slow at everyday life tasks. So I decided to downgrade back to Mavericks.

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I have a 2008 iMac 8,1 Core 2 Duo running OS X 10.10.4 Yosemite. Yosemite actually consumes less HDD space and appears to run faster than older versions of OS X.

My recommendation is always upgrade to the latest OS.

Note also about two years ago replaced original 1+1GB RAM... now have (2+4) 6 GB 800 MHz DDR2 SDRAM. Works beautifully.

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Anything above 10.10 has so much disk I/O it could fry the older hard drive (source: Apple Genius)

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Your instincts are correct—avoid updating to Yosemite or any later OS. The transparency effects Apple introduced in their graphical facelift can be taxing on older machines, and I have directly experienced many computers become significantly less speedy as a result.

Snow Leopard will likely feel the most speedy on your machine. However, if you need something a little more recent, macOS X 10.9 Mavericks is a good compromise OS to stick with. It should feel almost as fast as Snow Leopard, and you since you're already on Lion, you won't have to deal with the hassle of downgrading (which requires a clean install).

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