I think that GE and I must be vitual clones of each other...
[ GE, you don't work for a well-known ISP based down there, do you ?
]
Cornish Jack,
I'm sure that its
not a basic HW performance issue. Like GE, I have had FreeBSD running on very low-spec boxes (though admittedly I didn't try running X on a 486 ;-) ) My central server at home is a "paltry" P-166 with 64Mb RAM and a 4GB system disc (more for user data, obviously) -- and this box really rocks (for my needs, anyway)
For interest, you may like to know that the SmoothWall (
www.smoothwall.org) Linux-based software firewall/router will quite happily run on a P-75 with 8Meg of RAM -- that was the only box a friend had available, and it runs fine.
Back to your system, you may want to upgrade the memory to 128M if you can, but otherwise it should certainly have enough grunt to run Linux (or try FreeBSD,
www.freebsd.org 
)