256mb of Memory may be the minimum on the box, but it is not going to cut it. You'll need at least 1GB, and if your a performance freak, 2GB, but no more than that unless you feel like having bragging rights.
Chuck that Celeron CPU. Get something in the Athlon 64 2.0Ghz+ range or Intel P4 3Ghz+ range, if you want more than that, Core 2 Duo or FX CPU's are the solution.
Get a decent video card, like an Nvidia 7600 or 7900, or ATI X800, X1800, X1900.
I normally would be able to recommend TrainzOptions settings to fix things, but in all honesty, you system is too old to do anything but upgrade.
Cheers,
John