I'd recommend that you give Ubuntu Server a try... let it install and see where you end up


As for a GUI, you should definitely be able to get something up and running I used to run GUIs on my Pentium 75 w/ 24MB RAM... mind you those were older and designed to be crap

xfce is probably a good bet once you get the os installed.. just apt-get install xfce and you'll most likely be good to go.