I have an old unuseable computer at home that became useless after a hard disk failure. I don't want to spend money on buying a new PATA IDE HDD for it, so I was wondering if I can use a PXE boot server on my notebook(using a virtual machine with Linux) and boot a Linux on the old machine with PXE without using Hard Disk. It is possible? Do I will need to make some extra configuration or use some specific enviroment do do this?
Yes, that is possible. In fact, it's even feasible... Provided your notebook supports PXE booting, of course. Though I've never personally tried it. Your laptop would have a decent shot at it being workable if you have a fair bit of RAM in there, as you won't have swap.
If, by chance, PXE booting is a dead end for you, then I'd setup Linux on a bootable USB drive and run off that... In fact, I'd do that long before PXE, myself.