Linux light - PCLinuxOS 2010.7 Openbox
Ok, there are smaller, leaner distributions out there like Tiny Core or these two if you prefer a system that's in many ways similar, but PCLinuxOS Openbox is pretty good while still providing a full set of applications for the consumer desktop, incl. flash, multimedia codecs, wireless.
The Lxde version will give you a nicer menu with icons though, and a few more on panel and desktop. This accessibility may be important to some people. It also comes with Dropbox for online storage, which underlines that in the words on the website is "especially designed for cloud computers with low hardware specifications, such as, netbooks, mobile devices".
The Openbox version comes in at 596.2 MB and is actually 10 MB more than the Lxde one but also adds a few more applications like audacious and xmms and uses the lighter xarchiver instead of file-roller.