i'm very happy with my 1.6ghz pentium-mobile single-core notebook with just 1gb ram without any use for the internal harddrive. in this configuration even heavy packages like libreoffice, thunderbird, firefox, gimp, minitube run without any problems.
i run 4 identical notebooks at different places with the same usb-stick that are regularly cloned to two copies as a backup and for the usage of the same configuarion at the same time. i reduced the backup-size to ~1mb with all essential configuration-files after deleting all bloatware.
keep on hacking on lean hardware, it's worth.