I think given the fact soho and std have the same base, there is really not important difference between them. Of course, std is lighter than soho, the ram usage is the main diff, imho. But if you boot in tui, they are the same to me.
As far as I know, a single cd distro is a small one for today standards. A 700mb download is not a very big one, (and I live in a country where internet is expensive, I connect with a UsRobotic 56k dial up modem, a nice old serial one, but I download the isos in an internet cafe for AR$ 5, US$ 1.5).
One thing to think about is Xfce is getting bigger. In a 128ram box, I uninstall xfce and install fluxbox or icewm. Not too much work. You can get a slimed down VL just using the installer carefuly. An option to not install Xfce but yes X would be useful, though, if you dont have much hd space.
I read a Con Kolivas interview some time ago (sorry I lost the link) where the guy said basicly there is no good desktop today. And I think he is right. Think about it, the systems are not essentially better than 10 years ago, and the hardware needed to run it is 10 times bigger. A nice example is Vista, it is not essentially different than w98 (but for the tons of drivers included) and the sys required is 32 times bigger.
IMHO, In that scenario, VL is a terrific os, giving a lot of features with a very reasonable list of hardware requeriments. Of course, it will not cover every one needs, but that is why there is puppy linux.