The firewall Distro that i am using is now called clark connect which i am running on a amd sempron 1ghz 128mb sd ram with a 5200FX geforce card and it works like a charm
There are other distros like ipcop,smoothwall,shorewall but the one i like the most is this
ASG Security gateway which is almost like 600mb iso image which comes with all features that you might require like DDNS,dhcp,webproxy,netfilter,IDS\IPS,VPN,ntp, and more,there is a free version of it on their site which you can download along with the license key free of cost. If you like ASG make sure you have a good system with atleast 512+mb ram.
By the way you can choose any distro if you wanted to run dhcp,all you need is dhcpd package.