I've tried version 2 and it was not too bad, although I noticed that various reviewers had had problems. Version 3 seems a step back, however.

Using the live CD (a magazine cover disk), it sporadically lost the ethernet port, while the web-browser Midori garbled addresses after I typed them in. When I reset the computer and returned to Fedora, I found the router had been so traumatised by Slitaz that it had stopped working: I had to turn it off to restore it.

After installing from the distributor's iso file, networking is now functioning and Midori works (very slowly). On the other hand, I cannot get Mplayer to play any video files. The keyboard driver for the UK does not support Compose or Third Level Shift: there is no configuration tool, and neither setxkbmap nor re-writing xorg.conf works.

If you need a light-weight distro, try Puppy; it may not have the eye-candy of Slitaz, but at least it works.

This post comes from a SliTaz 3.0 installation on our elderly Acer 5684 laptop with nVidia 7600 graphics.
It boots up to a reported 56MB RAM usage (according to Conky & Htop), with nVidia 190 series driver installed and compositing enabled (xcompmgr).
Been using it for 'production' for a month or so, and am getting the hang of the mildly quirky shell (bash is optional) although it seems to be short of man pages. Am getting by on command -h for now!
The desktop gets serious praise for its good looks, and its light footprint is a major bonus - we have a number of ancient laptops with P3 cpus and 128M RAM that our grandkids use.
Puppy works well on these, but not (eg) Xubuntu/Lubuntu.
We love Puppy, and greatly admire Barry Kauler's massive achievements - but for an HD installation we are moving to SliTaz because Puppy's philosophy makes it hard to have conventional user accounts and security.
SliTaz is yet another wonderfully crafted distribution with some serious capability in a truly tiny package. Good looking and easy to use, too.
There are over 2000 packages in the repository currently, so one may find that favourites are missing - but there does seem to be something for most of our needs.... the only big omission to date (for us) is a selection of logic games to while away the minutes whilst things are downloading, etc.
But.... we have found a recipe (Receipt) on their website to install Simon Tatham's (SGT) logic puzzles, so will be attempting to cook this up using the TazWok utility.....
We also installed SliTaz 3.0 stable on our Acer Revo 3610 micro-desktop (Atom 330 2-core, nVidia ION 9400 graphics) and it is seriously quick to boot and run on this tiny box. Seems to suit it very well, and looks good too.
Not perfect - slightly quirky - but well worth getting used to for its combination of performance and low footprint. A really well-balanced micro distribution - do try it and see how it works on your system using the Live CD if you fancy something very small and well featured.

All the best, Ben