With the PCTel softmodem (on CMedia audio chip or VIA/SiS chipset integrated modem channel), I've seen 20 percent CPU load on 667 MHz VIA C3 and about 35 percent on a Cyrix MII-333. Your Pentium-166 might just so work, but it'll be no fun - there's got to be some CPU time left to do something with the incoming data ... besides, I'm quite sure that most of those modem drivers need MMX instruction set anyway.
This is a clear case of Use An External Modem That Has Its Own Brain. Legacy serial port stylee, please.
regards, Peter