I'd suggest 8.04 xubuntu on that machine.
I have a DELL laptop (Latitude D600)
and it has very similar specs to your Compaq.

I have been running xubuntu for more than a full
year now, after trying others such as
Fedora and Open Suse. Xubuntu just responds better,
so I kept it. It's a good distro that will
allow you to install and use apps for both
GNOME and/or KDE - but for the meantime,
it's a solid, recent, lighter-weight linux that
should have you up and running in little time.