I recently inherited my brothers old laptop, since he didnt need it no more. Its a Celeron 2.0 Ghz machine with only 192 megabytes of RAM, since 64 megabytes of the actual 256 megs goes to the radeon graphics-card.
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Debian is really nice on all kinds of systems, and I actually can run Gnome without too much lag, but if you want a bit of speed on your old system, then the above will work great. FLWM isnt really a nice-looking window-manager, but it does what I need it to. It can take a while to get used to the fact that the window-borders sits on the left of your windows, but after just a couple of hours it feels comfortable. If you dont like flwm, there are lots of alternatives. IceWM and Fluxbox are nice, and Enlightenment is nice if you want some bling without slowing down an old system too much. Also, ude, sawfish, afterstep, windowmaker and many more are available in most distros repositories.