Welcome to Mac-Forums, symboleyes.
I would say that the best OS X version for that Power Mac would be Mac OS X Panther (10.3.x). It isn't filled with eye candy like Tiger is and doesn't demand too much horse-power and it was a very stable OS. The last version, 10.3.9 had ironed out pretty much all the bugs. It wouldn't hurt if you added some RAM, of course but 512 is ok.
Is the Blue&White running already running on OS X? If not, make sure you don't need any
firmware updates.
And well we're here if anything should go wrong. Good luck!