Hi
If you are running RHEL as opposed to Red Hat I suggest that you invest in some additional RAM, 256 MB is prohibitively low and will result in low system performance.
I concur with the suggestion that you take a look at Centos.
However, you should first take a good look at the hardware that you have available, in particular any legacy devices (especially SCSI controllers, etc). The support for these devices (together with your CPU, HDD, and RAM capacities) will determine which versions of Red Hat you will be able to use.
Please carefully consider your actual project requirements (not stated in your question) before you decide which Distro to use. There is no point in overkill if you do not require it)
For system requirements for the various releases start at
www.redhat.com
Hope that assists.
Regards
Chris