I've generally made do with ancient hardware. There are some
headaches but there are a lot of light applications in *nix that make doing
so livable.

It's possible your difficulty in booting a live CD could be a memory
issue. Either not enough, or bad block somewhere. Alternately, I guess
there could be a problem with the newer Kernels and the integrated graphics
on the P4... I've got two pcs with a P4, but both are w/o monitors
currently and running a fairly old kernel. I do know I could boot 10.04
live CD on one of them... but haven't tried later versions (and don't have
a monitor to do it with anymore...).

I also had a laptop with a P3 that would always hang halfway through
loading any live CD I tried except, apparently Puppy Linux... This was due
to some sort of time out on the CD-ROM reader as far as I could tell... I
base that on the fact that Puppy ran entirely from memory with no problems,
and X gui worked fine w/o messing with anything after I installed it piece
at a time from a headless server install.

Anyway, considering the more intense graphic requirements of later than
Ubuntu 10.04, I think you are making a good choice sticking with 10.04.
That is also what I am doing on my machines.