I have an old Pentium 2 computer 400Mhz running Windows XP with 10mb network card.
Can i run a dedicated server (without graphics) on this PC or would this be to much for this computer??

It should work fine, providing the connection is enough to support the amount of people you want in the server. The lfs dedi uses next to nothing in terms of cpu and memory. I ran a lfs dedi on a Celeron 400mhz with 160mb ram and it worked fine.

It`ll be fine. My occasional online server runs on a PII 400Mhz, with 640M mem in XPSP2. Works perfectly. Only limit for me is my upload of 768K which limits it to 11 players plus 1 slot for admin at 6pps.