After the recent round up of mini distros in the magazine I had a look at them and liked Puppy the best. While perhaps not for complete newbies (or 1sf) it is a little cracker that flies on any machine with enough RAM to load the ramdisk into memory. It can be run from removable media (such as CDs or a USB stick) with the option to keep some files on the hard disk or go for a full install. The simple text based wizards for setting up services such as networking haven't failed me yet. It is also extensible using it's own pupget packages and installer. If there was a 64-bit version I might almost (but not quite) install it on my main box
You can find the announcement here with link to documentation and downloads.