I am writing this post from a 100% FREE Operating System which requires only 50MB of disk space for a full install.
It isn't installed on the computer that I'm using, because it is missing the hard drive. The OS is loaded into the RAM of an old Pentium-II, and will occasionally search the CD for resources.
You can check it out at:
http://www.damnsmalllinux.org/
It's usable for a workstation / web browser, but I will be reviewing the other options for older computers before I decide what to install on my "new" eIDE hard drive...when it gets here.
:)