Linux may run on there fine but putting anything newer like XP is going to be pushing the system with only 384 megs of memory.
I would suggest increasing the memory to 1 gig if possible and then a larger capacity hd maybe a 250 gig. First check the memory out by following the instructions below.
Go to HERE
and run the Crucial
This will give you the exact memory configuration for your system.
You do not have to buy the memory from there, but write down the information and if you need assistance in purchasing the upgrade memory GTG can assist with suggestions also.