Thanks a lot guys, especially JonMS. I can report that the 10.5.8 (optimized, downloaded from torrent) installed and works just fine (using carbon copy cloner).
1. I could connect an old usb hub (1.1) and can verify that it works. (I don't have a USB 2 hub at the moment to test).
2. I didn't check the analog audio out, but can verify a USB audio interface works. Mine is an el cheapo one that looks like a USB flash drive but with a headphone port on it. I connect it through the hub.
3. I managed to connect USb flash drives to the system too through the hub. An external hardware (USB powered) didn't work however, not enough power.
4. The system is a bit slow. The main bottleneck is the limited amount of RAM, while the 1 GHz CPU and the GPU (that works just fine) seems to work great while there is enough free memory. The hard drive is quite slow, so as soon as you hit the disk for swap things get too slow.
5. To minimize memory usage, I disabled spotlight, turned off all sharing (JonMS has screen, internet and file sharing turned on).
After that, Ihave something like 70MB wired memory, 80MB active and about 130MB free (free + inactive).
To me it's a single application machine. I either let it run itunes to play internet radio, or run chrome (in my experience chrome has the best memory management of "capable" browsers. By capable I mean (chrome, firefox, safari). Unfortunately Netsurf crashes on this machine (while it works fine on my macbook pro 10.6).
At some point I will try connecting a USB 2.0 hi speed hub with a high speed USB flash, and will see if moving the swap file to it has any impact. But for now, I'm quite happy with my new Mac!