I tried this twice.
I downloaded the Debian 5.0.5 Net Installer CD (which contains a basic system - the rest is downloaded) and used it to install the basic Debian system we've all come to love and enjoy - no GUI, no extras.
The first time, I played around with the command line. I surfed the web with Lynx, listened to music with MOC (Music On Console) and made text files with Vim. Aside from the issues with Lynx not being able to log into some websites, I was pretty impressed at how well it worked. I even got Gmail working in HTML mode (which is what I always use).
Then I installed Xorg, Flubox, and rxvt-unicode. After creating a file called ".xinitrc" and putting the line "exec fluxbox" into that file, all I had to do was run "startx" (just like the good old days when nothing ever worked!) and I had a desktop.
The second time I installed Debian I decided to make a fully functional desktop that I could use with as little power required. I decided to see how Debian's Gnome was doing, so I installed lynx again along with Xorg and gnome-core.
After throwing "exec gnome-session" into .xinitrc, I ran startx and was greeted with the sight of the familiar Debian desktop, without any applications installed. All I did was use Lynx to download Firefox (which was easier than I anticipated), remember how to unzip the files (bzip2 -d and then tar -xf), make some links to the binary, and I had a fully workable desktop.
It used 100 MB on idle (maybe less on machines with less RAM), 1 GB of hard drive space, and next to no CPU power. I love being an OS enthusiast.