> I should have mentioned that the primary use would be development.

Chetan,
I use slicehost virtual private server to host some of my websites,
and it has a similar configuration (256MB RAM). This might not be an
apples-to-apples comparison because CPU that I'm guaranteed is likely
to be better than your CPU.

In any case, I am able to do a reasonable amount of development (and a
lot of deployment) using ubuntu-8.10 - but without the X part. So I
doing command-line and emacs. That's good enough for me, and it runs
very well with just 256 MB.

So that is something you might consider trying.

navin.

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