If you want a "stripped down" but graphical distro, you could always look at Damn Small Linux
, a spin-off of Knoppix. It was originally designed to boot and run off a "business card" (50Mb) CD-R, but has since been adapted to install on USB pen drives, hard disks and even those ultra-low-power Mini-ITX PCs which boot off a CF card.
How suitable DSL would be for what you want to do, I don't know, but you can boot and run it from the CD first if you want to give it a test run. DSL includes XMMS, but I'm not sure how easy it is to set up for video - try the DSL site for more info.
Also: DSL versions after 0.9 (0.9.2 is just out) include Firefox, which is a great improvement on Dillo. The window manager is Fluxbox, which is quite different from GNOME/KDE, but minimalist in a quite pleasing way.
It's a 50Mb download for the ISO, so if you can manage that, DSL could be worth a try.