The previous reply is directly on-target,
but let me add an additional 2 cents
My experience is that it takes *at least* 80MB of
RAM to run a gui. So you will be limited to a
command-line os.
You do have a CDROM drive hanging off the parallel
port, but this limits you very much. You can't boot from
it -- and I have never experienced a linux machine with
the proper drivers for a parallel-port CD. Anybody care
to chip in on this point?
You did not list a Network card for the machine. So,
The only way to install an OS is by using the floppy drive.
Or, by using a boot floppy that has parallel-port cd drivers.
This might be your biggest challenge.
So, assuming you can boot a floppy that will allow access to a cd,
then here is my suggestion.
Download and burn to cd a so-called "live distro". These are complete
Linux distributions that run from cd. Many of them give you the choice
of cui/gui at boot time.
Check out DistroWatch:
http://distrowatch.com/
I run Suse/Novell for my main system, but my favorite
livecd is SLAX. You can find SLAX at DistroWatch. It is very
small, uses few resources, and boots to a command-line interface.
(but a KDE is only a command away)