I'd say Fluxbuntu, Xubuntu or maybe Puppy Linux. Absolute Linux looks fairly nice and might be the fastest, since it's based on Slackware (Slackware can run on
very low spec machines). Blizzard's games are known to run fairly well with Wine (a Windows emulation thing that runs on Unix-like systems). I can't say about Daggerfall, or the others, but you could check out the Wine app database that lists how well programs run through it (
http://appdb.winehq.org/ ).
I recommend putting more RAM in that machine. RAM access is MUCH faster than hard drive access, and your computer will have to use virtual memory/swap space to run most programs. Getting the RAM up to 1 GB should help a fair amount.
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