on a system that old I'd look at Debian, slackware or gentoo. Depending on your needs
Debian being the easiest.
Install just the base system
on first boot it will be a text only virtual console
login as root
apt-get update
apt-get install xorg fluxbox firefox gimp pidgin
and what ever else your need for the system install at this point. This will set you up with a very decent system
Note your want to make sure your connected to the net some how, either by a switch,hub, or directly to the modem.
But debian is very easy to customize and your get decent results on older hardware, I've used it on older hardware with great results. Just gnome and kde are going to slow you down on a system that was designed for windows 98(pentium I or II maybe III)
Gentoo of course will be slightly faster once its built but could take you a month on that hardware to compile basic stuff like X and firefox
On a system that old though, I'd probably only use it for a server purposes like dns or something light weight maybe a mail server but I wouldn't run X on it.