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You're in trouble. The Pentium III runs virtualization software very slowly. VMware will run, but slow. Go download from vmware.com and see for yourself.
Personally, I would add another HDD and install Linux on it. You're wife may object, but, it is a very good solution. Install a lightweight GUI (XFCE, AfterStep, etc) and see it fly. Install something a little heavier, gain more functionality, but, at a major perfomance cost (GNOME and KDE are usable on a P3 700MHz, I'm doing it now.)
You have plenty of RAM to be able to run a GUI for Linux, or run Linux in a Virtual Machine. Your processor will run it either way, just slowly in VMware.
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