Most suitable operating system

I have a Toshiba Satellite 1135 laptop, and i want to install a fedora core edition in my external USB hard drive.
I have
Intel celeron 1.8 ghz processor
256 mb ram.

Please suggest if there are other suitable linux OS which would be better than fedora core.

Try ubuntu 7.10

You should be pretty much ok with any distribution on that hardware, although if you could get to 512MB of RAM you would have a lot more capacity to deal with bloated applications.