it would take alittle while to install, but I would use gentoo... use a stage3 tarball to avoid the 2 days or so in base system compiling on that system. You should be able to have the base install done in 1.5 hours or so (considering the hour or so for the kernel compile). Then you can install blackbox or whatever by simply typing emerge blackbox and it'll download and compile everything needed... compiling X on her should take 12 hours or more, but not a big deal since you only do it once.
I have gentoo running on a P233MMX thats overclocked to 263MHz with 128 MB ram... its running as my file/ftp/irc server and runs very well... I dont have a gui installed on it, but I would expect blackbox/fluxbox/waimea to run very well. Your harddrive speed may be an issue as well, I dont have the proble since I added a udma66 card and an 80gb drive.
The primary issue with keeping your system fast is to not have a bunch of crap running in the background. Gentoo would only run the things you install (so only what you need). It would also teach you a good amount about some of the workings of linux by just installing it, actually it should be a VERY good learning experience for you, and I would recommend it on that aspect alone since this is your goal.