No, it wouldn't slow the connection down if set up right, and your old PC waqs fast enough (120MHz is plenty fast enough!

)
IPCop and smoothwall also have a filtering add-on called Dan's Guardian, which is easy to use, and allows you to set IP's to be filtered, and change the level of filtering. IOr, if you are a linux guru, you could just set up squid to filter sites for you.
The main reason I would suggest NOT to use win98 for a fireall box OS is that it is
very unsecure.

And ZA is not truly designed to act as a gateway firewall, IMO, which is what you want.
Cheers
Mick
1 gig HDD would be fine for basic IPCop install, but might be too small if you want to run internet filtering add-on like Dan's Guardian. 2 gig would be more realistic for Dan's Guardian, and at least 64MB sytem RAM.