Most versions will run fine on such a system
The popular distros are Ubuntu/Kubuntu - OpenSuse - PCLinuxOS - have a general look at click here and you'll see what's new and what's popular.
All will surf the net just fine - and come with web browsers, email clients and office software built-in. Try them out with "live cds" where the whole thing runs off a CD so you can try them all out.
Watching movies is a bit of a sore point, especially when it comes to protected movies. To play copy protected dvds you need to have libdvdcss installed, and you will have to hunt around for how to do that - but there's plenty of help out there about it.
Firewalls - some distros have them supplied with the distro - Firestarter and Smoothwall are common recommendations. If you run behind a router, remeber you already probably have a hardware firewall built-in.