One thing I forgot to add... I used to run OpenBSD on a machine like this. Nowhere near as point-and-click friendly, but it is very minimalist in what it installs by default. Install the ports tree on it, go into ports directory for the WM of your choice and "make install". Follow the docs on setting up X11. It's more work than setting up a Fedora box, but IMHO more appropriate for leveraging low end hardware on the desktop.
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