Welcome to the wattOS community.
I can well understand having W2K on a P3-800 - plenty good years there !
No reason to avoid Python or Geany on microwatt - Biff has said he does his daily development work using microwatt, so LXDE is obviously not a requirement. (He does have more cpu power, though.) Plus the i3 interface was designed by programmers for themselves, so you can expect it to work efficiently in that activity.
Your question about installs will probably bring more answers, but my experience is that the instal works best with no encryption, no instant downloads (post-install updating works well), etc In short, basic initial installs for lower-spec machines.
If your PC's motherboard will accept more than 256MB, then I suggest you add more RAM. 512 is probably a practical minimum for LXDE and for browsing ... and maybe for larger programming tasks. Should be inexpensive. (I'm aware that many P3 mobos top out at 512, but I think 256 limit belongs to Celerons of the P2 class.)
Hope your first play with wattOS went well.