You are really asking for a big hobby you know-- but you'll learn a lot!!
Dual boot systems usually
require quite a bit of tweaking, and now you want to boot both with old hardware.
Assume you'll have to mess with this
for a while. I'd recommend getting Linux running first, then doing what is needed to
get DOS/Windows running (including starting from scratch and wiping the Linux partition to
do it), then go back and resize the running DOS partition and stick linux back on.
Linux itself is quite tight in most distros, but the GUI sucks up memory and MIPS. So part of what you
are asking is what window manager to run (and most distros come with a choice). "Fluxbox" is
one of the lightest window managers out there.
WHere I am heading with this is Knoppix and Damn Small Linux ("DSL"). I don't know how well
vanilla Knoppix will run on your machine (for sure you'd want to change the window manager
to fluxbox from the KDE default), but Knoppix is what you need to know about if you'll be messing with old hardware a lot. (It's biggest strength is auto detection and configuration, and it
boots right from CD-ROM letting you see how well it will work with minimum fuss.)
If you determine that Knoppix is too big for you go right to
www.damnsmalllinux.org. Here is a quote from the lead developer of DSL.
"DSL is highly efficient: it has run successfully on a 486DX2 processor and on only 16 MB of RAM."
I am assuming there is a CD-ROM in this PC. Life is easiest if you can actually boot from this CD ROM,
which would require changing your BIOS settings to allow. Your old PC may not support this at all.
That's OK.
For DOS bootdisks, try.
Check out this site:
http://www.bootdisk.com/bootdisk.htm (for your DOS side).
Windows95 in 16 MByte? I think that was part of original specs, but don't expect it to run
very well. (It may have required 32 MByte even then.)
Let me know how this works for you. Scoring some additional memory for that old machine may be
worth the $20 it will cost you. I'd also recommend buying the book "Knoppix Hacks", which includes a Knoppix CD for free, but more importantly really explains how to go about using
old hardware. But if your goal is to spend $0, your project as you stated it is possible.