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There are many linux distros specifically designed for older hardware. The fastest ones I've tried are based off of slackware, namely, xenwalk and Vector Linux both of which use xfce. You may want to give them a try on your older hardware. I think you will find they perform better than xubuntu but they have a more limited package selection. Also, if you start installing and running a lot of heavy duty gnome and kde apps to these distros they start to slow down considerably to the point where you may as well be running kde or gnome. At least that's what I've noticed on my PIII 500MHz with 384MB of ram.
I have also been unhappy with the firefox performance on this type of hardware. After doing some careful monitoring, I believe the problem is more the limited cpu than the ram. With the Adblock Plus extension running on firefox, cpu utilization routinely went to 100% when changing web pages. Removing Adblock Plus resulted in cpu utilization dropping to normal levels but then you get the adds. Apparently searching that block list database is pretty cpu instensive. Opera was a little better but you run into similar problems when using add blocking software in opera.
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