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rajunpl...............
A PIII/700Mhz is a nice test box, be a good chap and put some more memory in it whilst it is still cheap. I recommend you try the Crucial site, they give just about the best deal in the UK.
I have a PIII/533 and the first thing I did was put 512Mb of RAM in it. My point is the better the spec you get your test machine up to the more things you can reasonably try out.
Only if you have several machines do you really want some low spec ones, and that is only for stress/performance testing before rolling out into a production environment. Or possibly to build a router.
Cheers
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As for installing Gentoo from the LiveCD you might want to look into the docs/install/txt/handbook.txt [or something like that] on the CD to get a kickstart and see what's the best type of install for oyu. On your computer, with those specs, I would definitely go for a Stage 1 install... just make sure you follow the installation instructions so you don't have to rebuild your system every week... I will warn you that a stage 1 install will take about a week until you'll be completely satisfied with it, although KDE alone took me [on a [email protected] machine] about 2 days, so if you use something light-weight like Flux or XFCE4 would compile much faster. On the upside you'll have a very efficient system on your given specs. Don't listen to what many say that Gentoo is so hard to install and you'll never get a Stage 1 done right the first time... Just make sure you know the hardware in the computer really well.
First thing's first, make sure you get your Internet working off the LiveCD [if it isn't automatically detected] and start up irssi, go to irc.freenode.net > #gentoo to get help... don't ask every little step, most of them are documented in the install file I told you about. Also I recommend building the system using portage with an active internet connection so you don't have to rebuild many things again when you update world.
This is just in case you want to try out Gentoo... My progression with Linux was RedHat 9, Slackware 9.1, PHLAK 0.2 [hd install], Knoppix-STD 0.1 [hd install], Slackware 10 then Gentoo. I think you can do a lot with Slack in terms of learning, it has helped me a lot.
Remember you want to learn GNU/Linux, not use it right away. So don't get very frustrated if you run into various problems... that's the learning curve you should expect, sometimes hardware not working, problems installing various programs [although Gentoo's portage has a marvelous dependency-calculating system] and so on. Those are expected and you'll avoid those problems as you advance in learning Linux. Don't give up at the first sign of trouble... that's what makes all the difference.