Because of their small or non-existent footprint, micro-Linuxes are especially suited to run on laptops - particularly if you use a company-provided laptop running Microsoft-Windows9x/NT. Or for installation purposes using another non Linux machine. There are several micro Linux distributions out there that boot from one or two floppies or CD/DVD.
See LinuxHQ or Tinux for details. You may find a FAQ and a mailing list about boot-floppies at Boot-Floppies-FAQ . Also a BootDisk-HOWTO is available. Thanks to Matthew D. Franz maintainer of Trinux for this tips and collecting most of the following URLs. See also the content of Console/Mini Distributions at FreshMeat .
Knoppix by Klaus Knopper is a bootable CD with a collection of GNU/Linux software, automatic hardware detection, and support for many graphics cards, sound cards, SCSI and USB devices and other peripherals. KNOPPIX can be used as a Linux demo, educational CD, rescue system, or adapted and used as a platform for commercial software product demos. It is not necessary to install anything on a hard disk. Due to on-the-fly decompression, the CD can have up to 2 GB of executable software installed on it. A kix (Knoppix mini CD) is now available in the contrib directory.
MuLinux by Michele Andreoli.
tomsrbt "The most Linux on one floppy. (distribution or panic disk)." by Tom Oehser.
Trinux Trinux "A Linux Security Toolkit" by Matthew D. Franz.
floppyfw by Thomas Lundquist.
DLX by Erich Boem
babel "A mini-distribution to run games"
Xdenu , quotating Alan Cox: "Xdenu is a small distribution program that installs as a set of DOS zips onto a DOS partition and gives you a complete X11 client workstation."
SmallLinux by Steven Gibson. Three disk micro-distribution of Linux and utilities. Based on kernel 1.2.11. Root disk is ext2 format and has fdisk and mkfs.ext2 so that a harddisk install can be done. Useful to boot up on old machines with less than 4MB of RAM.
cLIeNUX by Rick Hohensee client-use-oriented Linux distribution
linux-lite by Paul Gortmaker for very small systems with less than 2MB RAM and 10MB harddisk space (1.x.x kernel)
See also the packages at MetaLab formerly known as SunSite and the Boot-Disk-HOWTO .
You may also consider some of the boot floppies provided by various distributions falling into this category, e.g. the boot/rescue floppy of Debian/GNU Linux.
If you like to build your own flavour of a boot floppy you may do so manually, as described in the Boot-Disk-HOWTO or using some helper tools, for instance mkrboot (provided at least as a Debian/GNU Linux package) or pcinitrd, which is part of the PCMCIA-CS package by David Hinds.
Also you might try to build your Linux system on a ZIP drive. This is described in the ZIP-Install-HOWTO .