I don't have the time to read through all 900 replies, but I'm suprised one of the first ten didn't mention Linux. Comeon, this is pre-school stuff! (Well, for me anyway). Do some research on Linux and Overclockix, though I don't see how 400 mhz will help much (And you might need to hunt around for a distro that supports PPC).
Considering how slow that is, it might actually slow down the other computer since it has to wait for the slower one to work on the network, interpret commands, etc... Then take into account just the power it takes to run an OS, all the services on it... You're better off getting a new computer. A quad core desktop should do you some good.
If you want massive speed for under $500, try getting a computer with 2-4 gigs of DDR3 ram, a hard drive with at least 7200 RPM (15k might go a bit over $500 but it'd definitely worth it), an eSata port (You never know when you'll need it), Ethernet (wired makes wireless look like dialup and it's cheaper. a 100 foot long cable only costs $20, which is $60 less than a standard wifi card, and Ethernet comes standard in almost every PC today), and try to get XP on it. If you can't, that's okay. It doesn't matter much since you'll want to install Linux and use that, primarily. Dual-boot if you got xp or if you're new to Linux, otherwise overwrite Vista and use an ext3 file system. The closer data is to the center of the hard drive, the faster it can be used (It makes no sense, but it's true).
Now find a small Linux distro that can be loaded entirely into RAM. If configured properly, you should boot up in under twenty seconds and you'll be absolutely amazed by the speed. As an example... It takes about five to eight seconds to load Firefox on the average computer. This system would load it in under one second, usually in just under half, though your mileage may vary. It takes Windows about forty seconds to start up, and slowly gets longer since it manages files badly. It should take under twenty seconds for your first boot with Linux, and provided you update it properly, never go over twenty two.
If you'd like help in working with Linux or some information on where to find a good computer, just ask.