Absolutely. It's a current debian-based distro, still very much updated, which is designed pretty much for just this sort of thing. It's a 50mb ISO, and will install to the hard drive (if you want it to) for ~200mb. By default the ISO is a LiveCD.
I'm running the latest release, DSL2.2 on my P166, which came still with its 5 1/4" floppy drive. It came with a choice of Win95 or DOS 6.0 :-)
It has one PCI slot, which I've got a Netgear MA311 wireless card in. DSL runs _beautifully_, using Fluxbox (a lightweight window manager), and all associated services. It's my file/printserver, and is very nice
You can either run DSL as a bootable LiveCD, requiring no harddrive install at all, or you can install it to the hard drive and make all your configuration changes permanent. It just depends how much you want to screw with things.