Not with peanut, it installs everything from the disc right after formatting is complete. Last time I installed it it came with a pile of stuff, GIMP, KDE, Enlightenment, TuxPuck, Netscape, all manner of cruft, although nowadays I think there are 2 different ISO sizes. Vector I think you can select a few of the packages that you don't want. Vector is a pretty good system, but being slack-based it can be difficult to setup and run if you are an un-experienced linux user.
I would seriously suggest Mandrake if you are not comfortable using the shell or have little linux experience, as it is indeed very easy to install a system that is only 300-400MB for mostly everything you said you need, (X, WM, gcc) with MDK. All you need to install a system is the first disc, then anything else you need can be urpmi'd onto your system later. If you think that the Redhat or Mandrake installs take hours and give you all kinds of crap that you don't need it's because you're installing them wrong, (with KDE and all that no doubt). A minimal install of MDK that gets you to the point of being able to urpmi the rest of the parts you need is under 200MB, (yes I know, crufty, but for the newbie friendly distros it's very easy to setup exactly the type of system that you want, and that 200MB includes lots of generally useful stuff like python and perl that is used to run the system if IIRC).
Debian, Gentoo, Slack, LFS can all be much smaller and tighter distros, but you lose out on ease of use for the uninitiated user. If you want to go the route of learning a lot about linux right away then Debian, Slack, or Gentoo all offer very customizable setups and you should check one of them out, but you can do essentially the same thing with MDK, albeit with a bit more space taken up and whatnot.
If you decide to go the very small route then I'm fairly sure that Morphix's Light GUI disc comes with a hard drive install option, as does Damn Small Linux and the other run from CD distros. That way you can run the various distros and see if you like any of them before you decide what to install. The light GUI version of Morphix is around 200MBs if IIRC and although a bit buggy and it didn't boot from all of my boxes it is a pretty decent and quick little system that can be extended via apt-get, as can the rest of these types of distros.