Hi RedCamel,
I've setup a Pentium 1 ~133 MHz and 16-32 MB RAM, 500 MB HDD (haven't seen the machine for a long time

) for a school's DNS server. I'm running Debian Woody(Stable), BIND and SSH server.
Debian Stable is a great choice for such a server, if the software vesrion of that date (pretty old) will serve your needs.
A really basic install of Debian is around 200 MB (+swap space).
Greets, Blaz.