Everything said above is correct. However, I had Debian Sarge running in a 486 with 16 MB of RAM. I used it as home server for long time, no X of course. To install Debian 2 floppies are needed and a good Internet connection.
You can run X with 48 MB, but use one of those lightweight window managers. KDE and such are not suitable. For instance, when installing Debian do not install 'Desktop Environment'. Install only base system and add X and a window manager of choice manually. You will see there is plenty of hdd space left after install.