We have Lubuntu running really nicely on a netbook here.

You probably don't need anything quite that lightweight so I would probably suggest Linux Mint at this point in time.

I would recommend Linux MINT for a nice painless install, setup and use. It's basically Ubuntu Linux without the departure from the norm that is the Unity interface.

A Linux MINT installation will feel relatively familiar to people with Windows experience. I think Unity would feel foreign and don't recommend it as such.

This is ultimately about ease of use and what is most familiar is going to be easiest to adapt to.

Linux MINT also does a nice job of setting up things like audio and video codecs, etc. for increased compatibility out of the box.

I don't recall if anyone mentioned it in this thread already but you can get LibreOffice for Linux so you'd be good there for office apps. For Web browsing you could choose Firefox or Chrome or others. There are tons of free apps for all purposes.

Anyway, Linux MINT is focused on ease of use and presents a nice elegant interface with all of the everyday apps you could want and it is completely free. So I would recommend you Google for that and give it a try. They probably have a "LIVE CD" ISO that you can download and burn. This lets you boot up Linux without it installing to the hard drive. It lets you give it a spin without commitment and will also show how compatible it is with your PC hardware.

You could make a very nice little computer for Web browsing and basic office tasks with that old PC and Linux MINT.

Here is where you can read more about MINT and where to get it:

http://linuxmint.com/

Keep in mind there is a great community with Linux and it isn't hard to find support if you encounter any issues. Nowadays though a basic Linux install really isn't any more complicated than Windows. If you can manage a Windows PC then you can certainly learn to manage a Linux PC. It's not rocket science by any means. Sure, there is always some learning curve with something new but it really isn't all that bad. As friendly as they are, if you got a new Mac you would still have to learn the Mac way of doing things too. It's the same thing.

I object. To me, Fedora is basically the beta version of Red Hat Linux (RHEL). If you choose it, you are basically a beta tester for RHEL, ie. when your Fedora release is new, it can be quite buggy, and when the bugs are finally quashed, you are supposed to update to next (buggy) Fedora release. Fedora has quite a short life cycle, which is a problem for home users.

That's at least my experience for using Fedora. The only people who IMHO should choose Fedora are people who want to experience the newest inventions etc. in Linux (ie. want to be beta testers).

If Red Hat is your thing, I'd much rather choose e.g. CentOS, which is basically the free version of (stable) RHEL.

http://en.wikipedia.org/wiki/CentOS

http://www.centos.org/

But, for the OP, I propose Ubuntu simply because it is probably the most widely used Linux distribution on home PCs, a kind of Windows of Linuxes. So it is easier to find help online for it etc., especially when your interests are in home usage (web browsing, net banking, watching streamed video on it... some of the areas where Linux home user may face some issues, thus need extra help).

CentOS I'd possibly recommend to people who want to learn Linux professionally for their work or use for studies, because that way they get a better taste of Red Hat Linuxes. Just IMHO.

I think almost all linux distributions will work on your system. Just make sure to install a 32 bits distribution ( unless you plan to upgrade to 4 gb ram )

Now, it's up to you to test the various desktops available ( Xfce, KDE, Gnome, Unity ) and to make your mind. Xfce is the best suited for lower spec systems, KDE the heaviest. even so , KDE's hardware requirement are an 1Ghz CPU and 512 MB Ram .
Also note that all distros have their own focus

Ubuntu is a sound all-rounder, but not everyone appreciates Unity.
Kubuntu is an aternative, bases on the KDE desktop
Mint is a spin-off of Ubuntu, retaining the Gnome interface. I currently use it on my netbook .
Edubuntu is an education minded version of Unbuntu. Both my daughters use it

If you want to try games for linux, one of these 4 is a good starting point as getting the games is as simple as going to play-deb and miking your choices. There is also a lot of information available ( for instance on how to partition your drives etc...)

Opensuse is often well suited to older systems. I have installed it on a pentium M, 1gb RAM laptop and it actually runs faster than under win XP.

Centos is known for being reliable and stable.

I wouldn't start with Fedora either. See Timppu's message

Ah... Unity... many people seem to hate it. I personally have no problem with it (again, let me emphasize the word "personally"), and when I need a lower panel/taskbar I'd just use tint2 to help, but I can see that for some this may not be as convenient. So, although I have never tried it, I guess I would suggest Linux Mint, as already suggested above anyway.

Also, while I have not used this since the 2007 version, PCLinuxOS KDE version seems to be quite good, IMHO, if you want the layout to be a bit similar to Windows.

Anyway, let me repeat the bottom line (of my own opinion, of course), there is no PITA-free experience here. Let's say for example I have been using Linux for years, and have never used Windows, then suddenly I am forced to use Windows, I will not expect to have a PITA-free experience either, I will definitely face many bumps along the way. So is the case here. It takes time to get used to something new/different when you have gotten used to something else for a long time. But give Linux a try, and who knows you might like it. At least I do. Back in 2007 my company (with hundreds to a couple of thousands of users, in dozens of branches) migrated to Linux (back then we used PCLinuxOS 2007). I can tell you the migration process was not easy. Lots of complaints, lots of whinings. Fast forward to now, we are still using Linux, and even some of the top managers said they cannot go back to Windows as they love Linux already. So, it is all about getting used to and learning process. Anyway, good luck to you, hope you'll find a good (though not PITA-free) experience with Linux.

Linux Mint, Ubuntu, or Debian, in that order. All of them include libre-office and other apps. They'll come pre-set up with a bunch of normal desktop apps. But you're free to uninstall them and install your preferences (for example if you don't like the music player, get another one). There's 1000s of packages in the repos and if that's not enough Freshmeat and SourceForge have 1000s of other apps for you.

EDIT: If those are really slow on your hardware after adjusting them for best performance (vs. eye candy) then try one of the slimmed down distros, you can find a ton at distrowatch.

I'm going to have to hurt you.

Ubuntu and Unity are the worst option of the major Linux distros. Personally, I'd recommend going with Linux Mint, probably the LMDE version. Ubuntu is run by a bunch of crack smoking wannabe designers and they've demonstrated their contempt for the users with things like Unity. It has gotten better, probably, but it's a garbage distro.

Mint OTOH, is run by people that actually care about the end users and fixes a lot of what's wrong with the respective distros upon which it's based.

Other than that, I like PC-BSD, it's about as idiot proof as you're going to get, and quite a bit more stable. You're not going to find cases where a 3rd party app screws up the install the way that you sometimes do with Linux distros.
I take it you haven't actually loaded up PC-BSD or the now defunct DesktopBSD. I know there's a few other ones that are less used, but user focused. Linux tends to be a mess comparatively speaking with all the dependency issues.

That's not to say that Linux is bad, but the design philosophy of some of the distros is just not good for stability or reliability. Ubuntu is undoubtedly the worst of the major distros in that regards. I remember loading up a version awhile back and finding it to be essentially unusable because they had confused release with alpha and broke the interface.

Yeesh, that's pretty extreme. I find less of that with Debian, they value stability over most other factors so they're way easier. Still desktop in Linux-land is second to server so any Linux desktop can be sketchy depending on what you load on there. Linux Mint values stability and simplicity so I doubt the OP would have much difficulty. I don't recommend BSD simply because help is a bit harder to find should the newbie need it. There's nothing wrong with it fundamentally, though.

Honestly, that hasn't been true in at least a decade, and even then you could just ask on one of the mailing lists. These days there's a handful of fora which concentrate most of those questions.

I find it easier to get answers for *BSD as I don't have to worry as much about 3rd party applications being the source of and the solution to the problem. I'm not really sure that when you account for the signal to noise ratio that it's really any better, you just end up with a much larger number of duplicate solutions.

Thanks for mentioning PC-BSD, I'll try it out. I played around a bit with NetBSD, but installing / configuring most Linux distros seemed simpler.

About the 3rd party screwing up a Linux distro, I have a friend of mine that almost every month reinstalls Mint or Ubuntu, just because trying out random applications somehow messed up the whole OS installation. Maybe it is fixable or he's doing something wrong, but it is kind of funny. :D

By the way, Unity has been improved, a lot in 11.10. It runs way faster than when it was first introduced, and it is a lot more stable. But they are seriously going after OS X's design.

I can't call myself a normal user, since I understand the guts quite a bit better than most and I'm a software dev, but I am a bit boggled as to what your friend could possibly be doing to screw up his install. I'm still running Ubuntu 10.04 on my work machine and I have to install all kinds of crazy stuff on there to do my job. Perhaps I know something that I'm taking for granted, but to me it just sounds like your friend has a habit of doing ill advised things;)
Mailing lists, sure, I was thinking more forums and wikis which are how non-techies tend to be more comfortable interacting with the web. If you want to see their eyes get wide, though, tell em to get on IRC for an answer:)

IIRC (we were roommates last year, so), installing VMware caused something to get messed up, and Ubuntu didn't want to start up anymore. => Format. Installing some updates (might have been drivers, but delivered through the Software Updates tool) in Mint also screwed up something and the system didn't want to start. => Format.

He also messed up the system by playing with additional interfaces on Mint... he had the default interface, installed another one and both worked fine, but as soon as he restarted the machine, the system didn't want to boot up. => Format.

Might have been just bad luck, but heh, I was always bashing him and the awesomeness of his Linux laptop. :D

Actually, that many odd problems sounds a lot like hardware issues to me, but I'm guessing cause I can't see it to diagnose anything.

Still a couple of points to the OP, not directly related to what OS/Linux distro to choose, but what kind of issues you'll probably face if you go with Linux.

The situation you have is pretty much the reason I use Linux at home, ie. some old PC where I don't feel like buying/paying for Windows 7, XP (or 2000) is probably too insecure already, and "unofficial" versions of Windowses are out of question of course, because how do you know they are not full of trojans, keyloggers etc. by the happy pirates? (I use Linux also at work, but that's beside the point.). For new PCs which come pre-installed with e.g. Win7, for a home user who doesn't need Linux for studies or work there is very little, if any, reason to install Linux beside it, let alone replace it.

Anyway, the most prevalent issues I fought with Linux (Fedora or Ubuntu) in home use were (I think I've mentioned these here before):

1) Getting my network banking to work. My bank's system was very finicky about the Java version, ie. they required a recent, official Sun (or Oracle, nowadays?) Java client. The OpenJava or whatever that came with Fedora by default wasn't enough, even though it seems to work 95% of the time for any web pages which need Java.

Replacing OpenJava with Sun Java was a bit hard for me, but there were detailed instructions online, even for Fedora (I just Googled +fedora +my_bank_name, and presto, got the instructions, also learned there it was due to OpenJava (Or more precisely, the bank system was stupid for being so finicky). You just had to be very careful that you gave the commands exactly, and it was a bit of PITA. I don't know how many web pages really need the official Sun Java, but my bank did.

2) Watching some streaming videos on some web pages. For some of them, which didn't work right away, it seemed easy to find instructions how to make them work. But some DRM-protected media doesn't seem to be doable on Linux at the moment, mainly the DRM content using MS proprietary Silverlight. There is a Linux version of it, Moonlight, but it doesn't seem to work with some DRM-content, at least not yet. Installing Moonlight plugin was quite easy and semi-automatic, just like installing plugins in Windows (ie. a web page requested for it and pointed me to Moonlight, etc.).

3) Of course I needed to install also Flash Player plugin in order to see Youtubes etc., but frankly I think it wasn't any harder than installing Flash Player plugin on Windows. Adobe has apparently stated that they will not be releasing new Flash Player versions for Linux after certain version, but as far as I understand, it will still be available with Google Chrome browser, and I don't know if it really matters in the long run anyway, if HTML5 etc. will make Flash Player obsolete anyway. IPads and IPhones seem to be fine without Adobe Flashplayer, and apparently Windows 8 Metro will not support it either. Becoming obsolete, it is...

So depending what your home Linux system would be used for, you may run into many compatibility issues and have to google for more information to solve them (and some of them might not be solvable). But overall, I wouldn't fret about it too much, at least for me finding the instructions and answers with google was always quite easy.

Remember that most Linux instructions you'll find will use command prompt, ie. give exact Linux messages you must give in a terminal window. The same can usually be achieved by using graphical user interface (just like doing in Windows), but the reason the instructions online prefer using command prompt is because it is much easier to explain what exact commands to give, instead of "go to this menu, press this button..." etc., especially because the GUI may be different depending which distro, release or GUI you use. So don't be afraid of the command prompt examples.