If I remember correctly, that machine uses a Celeron M processor that does not support Physical Address Extensions (PAE), so the error you were likely getting was something like, "This kernel requires the following features not present on the CPU: pae."
You will need a 32 bit distribution that supports non-pae processors, which is getting harder to find. You might try reading this article for wisdom on getting Lubuntu or Xubuntu working on this machine. However it did not run very well the last time I tried it. I ended up trying to use bodhi Linux, which i believe still has a non-pae supporting kernel available. I also gave puppy Linux a good run, but that one doesn't like to be installed, but rather run as a bootable live image.
If you are feeling particularly crafty, I've heard talked of folks getting arch Linux working on these. You will have to pull out your best Google foo for that one though.