I have XP install on a 2GB CF card. It can't load a large web page due to limited swap file. So I am thinking to try a 4GB CF card next. The machine is a Thinkpad A30p with about 256MB of RAM. I found this CF to 2.5 inch ATA adapter in a small shop in Akihabara near Suihirocho for a few bucks.
My last desktop PC at home is running on a 10GB hard drive. Yes, it was cheap, something like $15. It is only used for downloading and writing CDs and DVDs.