G'day You might consider an AMD cpu -- tend to be bang for buck. Not that that is really linux related, just thought I throw that in.
For the distro to use, I found redhat/fedora easiest to install and they tend to be close to the cutting edge. However I'm sure you'll cope with Debian -- there are plenty of debian users in slug with advice and help. Mandrake and Suse would be comparable to Redhat in terms of features and ease of use. Often the one to use is the one your friends run so you can help each other! As Peter Rundle mentioned, you could use the old machine as a gateway/router. Throw yourself in the deep end! Good luck, Matt -- SLUG - Sydney Linux User's Group Mailing List - http://slug.org.au/ Subscription info and FAQs: http://slug.org.au/faq/mailinglists.html