What kind of system is needed to run Linux? This is a good question; the actual hardware requirements for the system change periodically. The Linux Hardware-HOWTO gives a (more or less) complete listing of hardware supported by Linux. The Linux INFO-SHEET provides another list.
At the very least, a hardware configuration that looks like the following is required:
Any ISA, EISA or VESA Local Bus 80386, 80486, or Pentium system will do. Currently, the MicroChannel (MCA) architecture (found on IBM PS/2 machines) is not supported. Many PCI bus systems are supported (see the Linux PCI HOWTO for details). Any CPU from the 386SX to the Pentium will work. You do not need a math coprocessor, although it is nice to have one.
You need at least 4 megabytes of memory in your machine. Technically, Linux will run with only 2 megs, but most installations and software require 4. The more memory you have, the happier you'll be. I suggest 8 or 16 megabytes if you're planning to use X-Windows.
Of course, you'll need a hard drive and an AT-standard drive controller. All MFM, RLL, and IDE drives and controllers should work. Many SCSI drives and adaptors are supported as well; the Linux SCSI-HOWTO contains more information on SCSI.
Linux can actually run on a single 5.25" HD floppy, but that's only useful for installation and maintenance.
Free space on your hard drive is needed as well. The amount of space needed depends on how much software you plan to install. Most installations require somewhere in the ballpark of 40 to 80 megs. This includes space for the software, swap space (used as virtual RAM on your machine), and free space for users, and so on.
It's conceivable that you could run a minimal Linux system in 10 megs or less, and it's conceivable that you could use well over 100 megs or more for all of your Linux software. The amount varies greatly depending on the amount of software you install and how much space you require. More about this later.
Linux will co-exist with other operating systems, such as MS-DOS, Microsoft Windows, or OS/2, on your hard drive. (In fact you can even access MS-DOS files and run some MS-DOS programs from Linux.) In other words, when partitioning your drive for Linux, MS-DOS or OS/2 live on their own partitions, and Linux exists on its own. We'll go into more detail later.
You do NOT need to be running MS-DOS, OS/2, or any other operating system to use Linux. Linux is a completely different, stand-alone operating system and does not rely on other OS's for installation and use.
You also need a Hercules, CGA, EGA, VGA, or Super VGA video card and monitor. In general, if your video card and monitor work under MS-DOS then it should work under Linux. However, if you wish to run X Windows, there are other restrictions on the supported video hardware. The Linux XFree86-HOWTO contains more information about running X and its requirements.
In all, the minimal setup for Linux is not much more than is required for most MS-DOS or MS Windows systems sold today. If you have a 386 or 486 with at least 4 megs of RAM, then you'll be happy running Linux. Linux does not require huge amounts of diskspace, memory, or processor speed. I (used to) run Linux on a 386/16 MHz (the slowest machine you can get) with 4 megs of RAM, and was quite happy. The more you want to do, the more memory (and faster processor) you'll need. In my experience a 486 with 16 megabytes of RAM running Linux outdoes several models of workstation.