Check my sig for a good link to a site in helping your distro choice, or search these forums, you'll get quite a few results for 'which distro'
Anyway i'm at a loose end right now so i'll address your questions.
Those specs are quite low for running a modern distro with KDE (i would go for a MUCH lighter DE/WM especially since it's going to be a web server), also i wouldn't really go for ubuntu either, it's user friendly but again, probably too high for those specs to run with any sort of optimum performance..
You'll be able to tweak any system to meet those requirements however there are some other considerations such as security, installing things such as .PHP etc.
seems a good bet, small and lightweight.
Also my usual recomendation for this type of thing - Debian - http://www.debian.org/
. Stable easily keeps upto date with security patches and runs like a trooper, plus you can get the net install cd and choose/download/install all the packages you need (otherwise it's 15 cds of packages...)
I see that your LONG term goal is the web server, which is good, because your primary objective is going to be learning Linux, once you have achieved that on a user friendly distro (don't get too comfortable with GUI admin tools) you can switch to a simpler (possibly more powerful, hopefully very stable) Distro for your goal.
As for installing from Ubuntus Livecd, i did a quick google, and checked their site, couldn't really find any reference to it. Maybe with more looking you could turn up something, or just download the install cd from the website...