can any ver of linux work on 128MB ram and 300 MHz processer

no, you should stick to the lower resource distros, like Xubuntu, Fluxubuntu, Puppy, DSL, DeLi and debian

I'd recommend Slackware Linux. With some experience (or trial-and-error) you can use it on quite slim hardware - I used Slackware 10 on PI machine (133Mhz, 40Mb RAM).

The main determning factors will be the window manager (gui) you choose and services that run daemons. The services likely won't have as large impact as the graphic environment. With your hardware specs you won't be able to run the big ones like KDE and Gnome. XFCE might be little slow but Fluxbox, fvwm, Window Maker and some others should be ok.

I think pretty much any distro would work. There are some that install the big heavy guis by default. In that case you'd just want to make sure you boot into runlevel 3 at least until you setup an appropriate window manager. I would agree Slackware is a good choice. Runlevel 3 is default, it offers the lighter window managers during installation and its "simple" design makes it friendly for older hardware.

You are on the edge. I have a P3 with 192 MB and it runs various versions of Linux with no issues. When it was a Windows box, I upgraded it from 128 to 192 and it was like night and day.

Another 64MB might be pretty cheap if you shop around.....