Puppy or DSL would probably work fine. VectorLinux is very fast, and I imagine Arch would belike lightning if you had the patience to set it up.
Debian I think would be too heavy. I had a 400MHz G3 (ppc) with 420MB of RAM that was still ever so slightly on the sluggish side with Debian (I ran it with OpenBox and lxpanel for my gui). With a weaker processor and less RAM, it would probably start to drag on you a bit.
Web-browsing/office/IM- Pidgin or Empathy should work fine for IM. I'd suggest trying out Midori for web browsing and AbiWord for your word processing. If you need a spreadsheet app, there's Gnumeric. OOo likes more RAM than that system has, so I'd shy away from it. Also, if you use an e-mail client, Claws is a lot lighter than ThunderBird.
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