I'm posting from a 120MHz Pentium I desktop, so I think we'll leave the sanity judgements out of the equation.
Strange graphics glitches are a common problem with laptops due to their unstandardised video modes. The "vga=" and framebuffer (eg. "fb800x600") boot commands (http://www.damnsmalllinux.org/wiki/cheat_codes.html) should, perhaps after some trial and error, provide a working configuration.
If you want to install DSL to the computer's HDD, the working graphics command can be added to the /boot/grub/menu.lst file, on the lines beginning with "kernel".