I started with Linux running Slackware 10.0 on an IBM PC300 (first generation Pentium 300 MHz chip) with 256 MB RAM.
It ran fine--a little slow, but faster than my P3 ran XP. The one limitation was that the first generation Pentium chip could not deal with video, though it was fine with audio.
I second snowpine's recommendation to buy more RAM. RAM is cheap these days and is the cheapest and easiest way to improve performance. I recently upped this P4 from 512 MB to 4 GB RAM and it has made a world of difference.
With a little more RAM, you should be able to run just about anything on that box. Get a nice USB external CD/DVD reader/writer and you will be set. Dalco
sells nice reliable stuff cheap.
One question though: Is it a P4 or a Celeron
? They aren't the same, but, if you're not planning to do heavy-duty scientific calculations, it probably doesn't matter all that much.