I have 7.6 and 8.1 on my 5300cs and 5300ce and they run just fine.
As far as suggestions, I would look at 8.5, but, I think 8.6 will require 30+ MB of RAM to be of any use. I had it working on my 5300ce with a full 64MB and SSD and is "acceptable", but, nearly as snappy as 7.6.
Regards...