Nlite and Vlite generally won't make your installation run much faster, it will just make it smaller. And you have to be careful not to leave out things you need for the install to work. You can save a lot of space by not installing many of the provided driver libraries, but sometimes a vendor's driver relies on components from those Microsoft libraries and your system may not work right. Definitely use with care, but if used right, you can cut down on space and with the right settings pick up a bit of speed.
I like the interface on Ubuntu 10.04 Netbook, so I run that. The Lubuntu variant of Ubuntu was also a fast performer when I tried it recently.