It's less about the distro than it is about what window environmet (Gnome, XFCE, KDE, etc.) that determines how fast it will run. If it's just going to be command-line like you say, you could run just about anything, but distros like ubuntu with easy install always come with a Desktop. My recommendation? #$%* Small linux, as it can run pretty much any computer decently. I had it running on a 200 Mhz PC once, and it didn't lag at all, even with a desktop environment running. You also don't need to use any hard drive space if you have at least 128 MB of RAM, boot off USB, copy OS to ram, remove USB drive and you're running a standalone, driveless desktop!
I used to use this off my flash! It's simple but I actually used it instead of Windows at school!