We've received an old Pentium 233/MMX laptop that has 64mb of RAM, a 10gb hard drive and is currently running Windows 98. I'm intending turning it into a basic Internet kiosk for our living room, which is definitely doable. The trick, however, will be to get it running a more powerful / stable operating system that can run the two basic services I want: web browsing and instant messaging.
The key problem is not going to be the software itself, as its pretty much decided for me already - for a web browser I'll probably be using Opera (Firefox is simply too big for this wee beastie) and either Google Talk, IM2 or maybe Gaim for the instant messaging. Along with that I'll probably install a minimalistic MP3/CD player and a firewall, and have a virus checker in the background incase needed.
The real problem, however, is finding a more up-to-date operating system than is currently installed, something that will fit within the 64mb memory limit that we're stuck with, and still leave room for running the software. While it may be possible to upgrade to more memory, I'm not currently sure its an investment worth our money, but I will research it anyway. So the main two options are Windows 2000 and some form of Linux (probably Fedora Core running Xfce). I'll probably start off trying Windows XP and then jump to Linux if that doesn't work up to snuff.
Before doing anything the first task will be to backup what's already on the drive incase its needed later, and I'll be using Acronis True Image to do that.
I'll let you know how it goes.