i would give up the idea of gnome or kde, fast (because it's not going to be
).
try for as lean a distro as possible. debian base install from the installer would be a good choice, or maybe something like vector. then with some tweaking (compile custom kernel, turn off services, hdparm, etc.), a window manager like fluxbox or ICEwm should be okay. i've used ICEwm on a 300mhz with 64mb and it was not bad at all.