Don't give up. My first installation was on a 386SX-20 with a 40MB disk and 6MB of RAM. (That's 40 megabytes, not gigabytes of disk). I made floppies on a friend's machine.
There's no easy way to learn ... it's like anything. You will find the HOWTOs more understandable as you get into it. Have a browse through the links I have given in FAQ80. Especially read the Hardware-HOWTO, and Winmodems-HOWTO, and the Getting Started manual.
Modem: It's a plugin card, so we call it a winmodem (internal), not a "hardware" one. A "hardware" one is plugged into a serial port on the the back of the box. ;-) Is it ISA or PCI? Has it got jumpers to set its IO address and IRQ? dmesg will probably show that you have two serial ports ... /dev/cua0 and /dev/cua1. These are the ones which have DB connectors on the back. You might have a mouse on one of them. An internal modem will need to be set to not interfere with a "real" serial port. If you are using "COM1" (/dev/cua0) you would set the modem to be "COM4" (/dev/cua3 ... see the different numbering?). Look at the www.linmodems.org site for information on "winmodems". If you have a BIOS option to disable the onboard serial ports, try that and see if the boot (or dmesg) shows the modem as a serial port. . That will show if it is colliding with the others.
Including PPP: Compiling the kernel is not too difficult. If you have the sources and compilers -- the "development" package, cd to /usr/src/linux and type "make menuconfig". (You'll need to be root for this). Just work through the prompts. You can get help at each question. You will make mistakes. ;-) It doesn't matter. You can try again. When you have done the configuration, you need to do "make dep", and "make zImage", (and maybe "make modules" and "make module_install"). There's a HOWTO on Kernel, too. With 16MB, the compile will take a while ... maybe an hour or so. You'll see lots of messages as it works. It might be a good idea to just copy the new kernel to a floppy rather than putting it to the normal boot place. "find ./ -name zImage" will locate it, or you will see the path in the last few messages as it is compressed. If you cd to that directory you can do "dd if=zImage of=/dev/fd0 bs=72k" with a blank floppy in the drive will make it into a bootable floppy.
It's great fun. Keep notes as you go. Don't feel terrible if you "break" it. You can reinstall it ... which is often much quicker than trying to fix it.