I have a thinkpad (the only kind i will ever buy - i love the trackpoint! ) 380D - 150MHz, 48MB of RAM, 2.1GB hdd, neomagic..whatever - and i have Debian Woody installed on it. I know it can handle X for short amounts of time (after about an hour things get weird) - but it handles console pretty nice. I thing you could probably run X comfortably with those specs, but that small amount of RAM wil hold you back.
It really depends on if you want console or X (gui) functionality. If you haven't already checked it out, consult the
Linux Distribution Chooser.