550mhz is a decently fast computer and can run linux pretty well. Regardless about what the minimum requirements are as stated by the distro. I am saying this because I am running a graphical desktop on a much slower 333mhz PII and it works well enough for my needs. If you are willing to invest more time, a distro like gentoo is definatly worth getting into.
and if you are really good, you can run your server completely command line
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P.S. if you are just running network file sharing you should use Samba, that is pretty much what people use. (you probably know that from knoppix)