I have been playing with the idea of having a durable, disposable server that i really dont care if it crashes and burns, literally...

1994 PS/2 Model 77s
16mb 70ns ram
510mb SCSI
Ethernet express/mp tc
8x IDE cd rom drive
1.44M floppy drive
Internet connection:56k dialup (may get fast as a 128k DSL line)

This computer doesnt have enough muscle to run win98, but can run win95 fairly well. I want to set up a public FTP and HTTP server (can be accessed by anyone with an internet connection)

With windows 95, it isnt "plug n' play" compatible with TCP/IP networking like win98 and above.

so, i need some version of linux that leaves me with at least 50mb of hard drive space, can set up networking as easy as in windows 98, and has some type of a GUI.

im not very good with assigning TCP/IP addresses, so i hope i dont have to do that, but i can if its required.

http://old.lwn.net/Distributions/

You will need somthing on the light side since your lacking disk space and RAM. Might want to investigate increasing RAM to 32 or 64.