Ran XP SP1 just fine on both a Pentium 166 MMX (Though this was a very minimal install used as a temporary IIS server) and a Pentium II 266 around 2006-2008, with 64MB and 128MB RAM I think, both seemed to run as well as they needed to.
I seem to think I severely altered the OS though, removing themes, visual effects, high color icons and a few other things to get as much speed as possible. The little MMX was noticeably hesitant at times though and would occasionally take a while to serve pages, rattling the hard drive - one of those disgusting 8GB Seagate Medalist things - causing violent sounds of death to emanate from the closet. It was a µATX system with a SiS 530 based PCChips board, Including a stupid PSU with PCChips branding (PC100) which smelled strangely of burning until it stopped working a few years later. This system started life as a standard Hull school computer, still have the case with my schools anti-theft branding on it, and strangely, it started out with a K6-2 that I was using elsewhere by then (i.e. in a better board)... Umm... I won't go into how I acquired it, but lets just say that when I got my hands on it in the latter half of 2005 I was still at school and at my school, there was a rule among the students; Anything left it the corridor was first come, first served. This included tables, chairs, drugs, booze, porn mags, guns, windows, floor tiles, radiators, knives, light bulbs and a few other things.
The Pentium II was generally fine until one fired Opera up, but the ATI Radeon 9200 and the small alterations to the OS helped. Games did run better in 98 though, as they always did, but the system was certainly usable, only leaving daily use a few years back after getting some upgrades and starting to fall apart... It was a scrap build, my first Pentium II, and it lasted a long time all things considered.