On a machine like that, you have a few choices:
Windows NT (It's old, but it would work fine)
Windows 98 SE (Would be fairly quick on this system)
Windows 2000 (A little sluggish on startup, but would otherwise be OK)
Windows ME (Would run OK, as long as you find drivers for your hardware)
Windows XP (It would be sluggish, espically if you used the new desktop themes)
Linux (Use an older distro. The new versions of KDE and GNOME are sluggish on old hardware)
Of course, older OS'es like Windows 95 and OS/2 would work fine as well.