Another vote for Xubuntu 6.10. The XFCE graphical interface is generally "lighter" than KDE/Gnome, and should work better on older/slower hardware. Xubuntu installs very few programs by default, and adding programs is super easy by using the repositories.
Here's a good wiki to get you rolling with Xubuntu. Its written around Ubuntu 6.10, but everything will work in Xubuntu 6.10.