[Sorry, I misread the first post and posted some stuff not belonging here - edited it out]
But anyway: Why not do a Debian Sarge server install? Easy configurable, and runs prefectly - you can change it into a gateway any time you want. I had that installation on a Pentium 233 MMX with 64 MB RAM - no troubles.
A nice start might also be tinysofa classic
- a minimal server distribution easily maintainable and configurable via apt-get.
And while we're at it: OpenBSD makes great servers/gateways/routers/anything, has a small footprint, is highly configurable - but requires some reading...