Polishlinux.org have an article about which distributions to use on your old hardware – naturally Damn Small Linux is one of the best options.
Read it here
There are however distros created especially for old hardware PCs. Here ia a few most interesting ones:
Damn Small Linux – a very popular low-resource Linux, based on Debian and Knoppix. Runs on a 486 in a graphical mode,
DeLi Linux – this is a real pearl. DeLi stands for Desktop Light Linux. It is capable of running on a 386 computer in a graphical mode! Lately, version 0.7 has been released. Certainly worth trying on some very old PCs.
Zenwalk – minimal requirements for Zenwalk are: Pentium III, 128 Mb RAM and 2Gb HDD. However, it can be run pretty fine on PII, as well. Zenwalk is a modern Linux distro for low-resource PC-s.