I would go with a 1 gigger. Never know what G3 will need! 256 ram is minimum, 512 better. And get at least a 64 mb video card. This setup will alllow you to use it for some time without slowing down too much with new software.

Or send me a PM, and I will hook you up with a site to get a 2.6 P4 without OS for about $300 delivered. Then just get Win XP at a computer show!