@anglerdk: Whilst I agree that what your are planning might be feasible in principle I'm not sure whether the approach via a VM is particular efficient. Here are some thoughts why I am (at least for now) not yet so sure about it. And I might need to add that I use a lot of (ad-hoc) VMs (mostly VBox and QEMU) to "play around" with TC.
I assume you are not going to use your target system (P2 300MHz , 128MB RAM) to run the VM, so how are your planning to get your setup (i.e. the content of your '.../tce' directory) from within the VM onto the target system? The options I could imagine are: (a) via network transfer, (b) via a USB drive.
As (a) would require a working NIC (and networking stack) on the target it looks to be a bit a of a "catch-22" situation.
The (b) option is therefore the more likely one. So one could boot TC from CD-ROM (or even the USB pendrive itself) on a "connected" host system, and download all the required extensions. Well, when going down this path why not install TC on the USB drive itself. That would lead to a situation where all the desired extensions already end up to on the "transfer" medium.
The one big problem in any of this thoughts is that the HW (whether using a VM or a different "native" host) would be different to the target system. So any (additional) drivers which work for the "download system" might not be the right ones for the "target system".
If you give us some idea of how you actually plan to "transfer" files I'm sure we could guide you more precisely in hopefully the right direction.