Rebuilding the oldest pc in the world

A client has handed me a dinosaur computer that 'hasn't been used in a while' - he is after a cleanup of the existing Windows XP, so it can be used as a spare machine.

Problem 1. There is only 256mb of RAM. I can't remember the last computer I saw with that little RAM - at least it is DDR, so I probably have some lying around somewhere...

Problem 2. It isn't running Windows XP. The splash screen comes up with the Windows 98 logo...

Problem 3. Even Windows 98 doesn't run on this thing... it hangs on boot. So a new install of Windows XP it is.

Problem 4. The CD drive is dodgy. This thing is starting to drive me nuts...

http://www.gigabyte.com.au/products/product-page.aspx?pid=1604#dl