Good version of Linux for Low-End Hardware

[Papps78]

I would recomend you to try Luit.

[xopher]

Gentoo with a WM of choice, eg. fluxbox, which is very versatile and configurable. I mean, it's fast as lightning, but you can still make it look (really) nice. You have to know exactly what you're doing with gentoo though.. So it might be out of the question..
If that's the case, then I'd suggest trying Xubuntu, with it's xfce desktop environment it's not quite as light as fluxbox, but Id say it'd work pretty well nonetheless. And hey, if it doesn't, there's always fluxbox available for *buntu too. And with it's APT backend, you can almost say it's the most powerful and versatile choice out there.

[nsap]

try dsl "damn small linux"

DSL is nice, but I'd say try one of the Ubuntu versions first. DSL is great for really low end hardware, but I'd say with a 500MHz CPU and a decent amount of RAM, it's probably got enough power to run something a little better than DSL.