Side note: If you're curious about using a given distro from a USB flash drive, the Pen Drive Linux site is a repository of tutorials explaining how to take many common Linux distributions and run them from such devices. Ubuntu, Knoppix, Gentoo, PcLinuxOS, SLAX, and many others are all covered here in detail.
Damn Small Linux, or DSL (not to be confused with that other DSL), has long been my favorite "tiny" distribution for both quick-and-dirty data recovery and rudimentary desktop functionality. It packs quite a bit into its 50 Mbytes of space: it boots in seconds, can run entirely from RAM on a 128 Mbyte machine, and it runs equally well as a live distribution and as an on-disk OS. I've used it to bring back to life more than a few machines declared too old to be usable for Windows or even other Linux distributions. If you're looking for a distribution that will run just about anything and get you started ASAP, DSL is probably the best place to start.
When you boot DSL (and it boots fast), one of the many boot-time options you can select is to load the whole distribution into RAM for the sake of speed. Because DSL fits in only around 50 Mbytes, this is one of the few distributions where you can get away with doing this on virtually any machine. I did some testing and found that you really need 96 Mbytes of RAM or more to run DSL entirely in memory; anything less than that and you need to run from the boot media.
I've rounded up five of what I feel to be the most notable and interesting of the tiny distributions. Each of these distros were tested in a relatively tight system configuration -- 128 Mbytes of RAM, and no more than 8 Gbytes of disk space -- so if they performed well in that environment, odds are they'd perform even better in a more sophisticated one. In addition to how well they worked as both a live distribution and as an installed operating system, I also looked at the mix of applications provided in the basic install and how useful they were in a general desktop setting.

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DSL crams more useful Linux tools into a 50 Mbyte distribution than seems possible, but seeing is believing. (click for image gallery)
Among the very smallest of the live CD distributions, and still one of the best, DSL crams an amazing amount of functional goodies into 50 Mbytes.
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