I've run XP SP3 on 256MB RAM before, it worked fine. None of the machines at my office have more that 512MB Ram, and they're all current, running XP SP3 and IE7 (but IE is disabled on most of them, with Firefox set as default). They run fine, so long as they're kept clean, however crapware and tracking cookies slow them down if they're not maintained well.
SUSE, like Windows is slow on a machine with 512MB RAM, I'm going try installing Ubuntu to see if that's better. KDE is crabby like Vista, Gnome is much better (and that's on a laptop with 1GB RAM).