Hi Zico,
Why don't you try CentOS? It's a rpm based distro whose
packages are binary compatible with RHEL. It's a very stable distro, which
is updated almost immediately (max a few weeks) after RHEL updates. Its used
by many people the world over to run servers. Maybe you can install a base
system and then install just what you need. Also try using the XFCE desktop
environment. Its better for systems low on resources as compared to
Gnome/KDE.
Regards,
Karthik Ramgopal
BITS Pilani