I have an old Dell Optiplex that's 200Mhz w/ 32M RAM, a 145W power supply which only has mobo, floppy & 2 HDD outs. I've got a HDD in the 1 HDD bracket the unit came with, and I modded the floppy bracket to make the other fit. Then I robbed the power cable from the CD-ROM to run the second HDD.
I want to use it's 2 IDE channels over our home network to access 2 more HDD's.
The drives I want to put in the old PC use NTFS (sorry, I'm lost in Linux).
I don't have a CD burner, so installation's real tough for me.
I'm pretty good in Windows, except maybe for apache & php stuff.
My experience in Linux hasn't been good yet- I don't suspect it will until I get a burner.
A year or so ago I tried Suse installing over FTP, and I tried learning Linux on that, but gave up after a week or so because it took a couple days to figure out how to do something that'd take me 5 mins in xp (install seti).
So far I've found a few live-floppys, and they're useless to me because they're just consoles. (except one that was a browser & a console).
Once I tried Coyote Linux & got stuck on a screen just typing aimlessly around the screen like a word processor.
I'm looking for something so single- purpose that I can't screw it up.

First of all, try Knoppix because it's a live-CD distro that has the KDE window manager for you to try out.

Second, Linux can't read NTFS. It can read FAT32 and ext3 or any other Linux FS, but not NTFS. Or, I think it can read it, but can't write to it. Either way, it'll have to be reformatted, but an install should take care of that for you.

For a very easy permanent install- use Fedora Core 3.

I think Knoppix won't run with 32 Mb. I think that for you Slackware would be a very good option, but I'm not very sure that it can be installed by FTP, so maybe something like Debian could be the best choice.

Anyway, as DJOtaku says, Linux can read NTFS without problem, but writting is not safe. Is it really important for you that the filesystem is NTFS? Because if you are going to serve the files on the network only, using Linux filesystems wouldn't be a big deal, I think.

If you have a non-dell computer you may want to invest in just a little bit more memory. Memory is sooo cheap nowadays! It will improve performance a bit. However, if you are not going to install a window manager, you're ok.

If he's got 32 Megs then it might be slightly harder to get hold of EDO sticks.