I'd say if you get the thing running Win 95/98 you woull be able to send/recieve quite a few files nicely.
Im setting one of My Celly systems up as a File server, as well as a Folding rig.
Specs of that are
735MHz
384MB ram
IDE Drives, probably 3 amounting to around 42GB.
(Have other drives on other machines)
Have had the thing goin before as a file server, but not set up as FTP.
Your system should do the job I think.
As long as you don't stress it out with XP to much.
If you do use that OS make sure you set everything to performance settings so the ram aint having to pull all the gui along with it aswell thus slowing all the other processes down.