Yes, Debian is a "text-mode" install. It is very suited for beginners who have the ability to follow directions and read.
1. Yes you can install Debian. At the boot install prompt, type bf24 which will install with at 2.4.18 kernel.
Package management is done with dpkg and apt. dpkg is the equivalent of rpm, only without the RedHat rpm dependency hell. IT JUST WORKS. Examples are apt-get install ssh and apt-get remove apache. It's that simple. Did I mention it just works?
2. Debian is perfect for daily use. This is due to apt-get and dpkg once again. To use Gnome 2.4 and KDE 3.x I choose to use the Debian Unstable branch. THIS is done by editing the file /etc/apt/sources.list. But first, I would install stable (Woody) if I were you, and then worry about moving to Testing or Unstable.
If you are determined to stay on Woody (3.0r1) and want newer versions you will have to use packages that have been backported.
First, get it installed. Then, come back and worry about getting package X.x running.
PS: don't forget to apt-get install ssh