BasicLinux is a mini-Linux that runs in a 4mb ramdisk. It has a fully-featured shell, an easy-to-use editor, and a variety of useful utilities. In particular, BasicLinux is well equipped for internet use: it can dial an ISP, browse the web, send/receive mail, and download files.
BasicLinux is a good distribution for an old 486. It is much leaner than RedHat and performs better on old hardware. Although BasicLinux initially runs on a ramdisk, it can be installed to its own HD partition, where additional packages can be added (including X and GCC).