One thing to note about the 386 platform is that it's relatively
challenging to find a kernel that will run on less than 4MB of RAM.  The
2.4 and 2.6 kernels both required at least 4MB of RAM to run.  You could
squeak by with 2MB on the 2.2 kernel, but just barely.  The only way I
was able to get it to work was by having a swap partition already
defined on the disk.  You might be able to find an old version of Linux
and an old version of XFree86 that could run on the 386 platform.
That's pretty much all you need for an LTSP thin client.  You'll need
the kernel, optionally a dhcp or bootp client, the NFS client software,
and of course X.  This will probably be a challenge.

Now, there are hacks out there for "small" kernels, but many of these
are designed for embedded devices that start out with 8MB of RAM
minimum.  For 386, you're going to have to open the vault and look for
dusty old apps.

You would do far better to procure a stack of Pentium class machines.
Buy either network bootable NIC's or Compaq flash cards to house the
minimal kernel and root software.

For the truely minimalistic, check out:

http://chippc.com/thin-clients/jack-pc/

"Wall socket PC"...  Totally awesome.

G'night!

Chad