I'm also using a P II 266, but it's running Win98 (!).
I created this beast out of mostly leftover parts...I bought one of those Premio cases with power supply, floppy and mobo from CompGeeks ($20), added one of their $5 soundcards, bought the CPU on EBAY for $5, and a vid card (also EBAY) for $5. I had a Quantum Bigfoot HDD laying around (actually in use as a doorstop) and an old CD-ROM. Add a bit of memory from my cache and VOILA'!!, I've got one bitchin' cow!
I use it for word processing...and playing MP3's (that's why I needed the soundcard...)
Edit: Gee, I failed to mention the Packard Bell monitor with the speakers mounted on the side....
Ain't it great to live in the computer age?