As MT said, once you're doing real work at the command-line, the distribution isn't too important -- as long as I've got vim and the GNU goodies I'm a happy chappie. Distributions with apt and dpkg make things easy to maintain, and the 6-month release cycle of Ubuntu keeps me pretty happy.
Having shit hardware too, I ditched Gnome/KDE a long time ago. Pure Openbox is ludicrously snappy and lightweight. If you're interested in going down the minimalist desktop environment route (you'll be surprised how little fancy shit you need, and the benefits are amazing on an old machine), check out K. Mandla's blog, especially the Software link at the top.
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