Thanks for the help so far.
In case of a crash or windows install I've got a copy of a Knoppix CD that is bootable, and it is good to know that I can add more memory later.
Still having a bit of trouble... with the backup Lilo. I get as far as "mount /dev/fd0 /mnt/floppy" (no quotes) and receive a Permission Denied message. I think it might be already mounted (I can see it from the KDE desktop) so on to the next step... "cp /tmp/mbr.bin /mnt/floppy" The error message states No Medium Found. The floppy was previously formatted to linux native (ext2), and i'm working in root.
I also can't copy the file to the floppy drive using the graphical interface. This is a bit worrying