DSL would be your best bet, but you might try out a minimal Arch installation. Since with arch you build up the system from base.
Arch provides a minimal environment
upon installation, (no GUI), compiled
for i686/x86-64 architectures. Arch is
lightweight, flexible, simple and aims
to be very UNIX-like. Its design
philosophy and implementation make it
easy to extend and mold into whatever
kind of system you're building- from a
minimalist console machine to the most
grandiose and feature rich desktop
environments available. Rather than
tearing out unneeded and unwanted
packages, Arch offers the power user
the ability to build up from a minimal
foundation without any defaults chosen
for them. It is the user who decides
what Arch Linux will be
- Arch Linux Wiki
I have arch installed on a 500MB RAM, 2GB Storage and 500 MHZ Intel CPU. A bith tight on storage, but otherwise perfect.
EDIT: Note that arch only works on i686 and x86-64 base systems
Otherwise, I have heard good things about SLAX