Well, I'm throwing in a little late here I guess, but yes, Linux is most likely the way to go.

I'm actually running Debian, Etch I believe, on a Pentium 2 300MHZ with no problems at all.

I can recall the first couple of times I ever installed Linux, I was so confused... Configuring x11 and so on. I was shocked when I installed Etch, the installation took care of everything for me. The standard GUI set up seems to include GUI tools for doing the vast majority of your configurations, set up and admin type tasks. It's great, GNU/Linux has really come a long, long way.