I'd strongly recommend putting 1GB in there, and changing the hard drive if you're going to store stuff on there.
Distro choice: The Ubuntu series is a good one to choose if you're new to Linux. I'd go with Ubuntu over Kubuntu though, for two reasons: 1) the support is a little better; 2) KDE 4 is newly released and not all that great yet (set to change with 4.2).
However, if you stick with 512MB, I'd definitely use Xubuntu. XFCE is much lighter on the resources, but still compatible with GNOME and KDE applications.
Music production: Linux isn't that great with this stuff right now.