well, my i set my son up with a p133, runs win95, added a 10 gig HD for cheap, added 32 meg memory (total 48 megs) (cheap) - guess what -
he can surf the net just fine
he has close to a thousand mp3's on his machine, and they sound great (no stuttering at all, while he surfs the net and does IM)
he can do his homework wordprocessing just fine.
i've got sound forge and photoshop (professional editions) on there, and he likes to fool around with them.
it works great as a general purpose computer - he does not do hard core gaming on the machine -
you can do alot with a "slow" machine without much memory.
heck - i remember when it was a "fast" machine with lots of memory!