the key is probably in the window manager.
IceWM or something would be much more suited then a KDE based system. Even Gnome uses less resources,
mandrake 10.0 on a 266 celeron here but i couldnt live without KDE so just put up with slowness on secondary PC
well thats about it.
if you know what your doing
recompile your kernel to custom and suit your system to make it smaller.