I know nightflier's right about the VL 7.0 Light installer being too heavy, but if you could get it installed there are performance and size advantages.
If you're adventuresome, boot the Light 7 CD and drop to the command line at first opportunity.
Set up a 256 MB swap partition, mkswap, and swapon. Now type "setup"(I think). Do the install, but do not set up swap during the install itself. Maybe the previously mounted swap will get you through. If it does, you'll see a "barebones" option -- pick that.
If that fails, maybe you can put the HD into another machine, run the installer, and at the first reboot after file installation power down. Put the HD back into the target machine for the rest so that post-install configuration will be correct.
If those fail or aren't to your taste, 6 Light is your best bet, hands down. I know. I tried absolutely everything else there is before (and after) installing it.