We went to our local recycling center in California today to get rid of some old receivers that we knew didn't belong in our apartment dumpster and we were blown away to find how much computer hardware piles up in our junkyards everyday. Since times are tough, we thought of a few clever ways you can make use of hardware that's lived past its expected lifetime (given they still work, of course).
1) If it's really slow, turn it into an MP3 player. As long as it as a decent sound card, you should be able to play MP3's since they don't require too much RAM for playback. If you don't have a sound card, you can always grab a used Soundblaster Live! on eBay for about $10.
2) Create a dedicated kitchen PC for internet browsing. If you have room, take out a shelf and throw the PC underneath somewhere. If you want to have the monitor on the countertop, you might have to drill a small hole for the wires.
3) Create a media center: This one is going to require a bit more juice - especially if you want it to record TV shows and play high-definition content. Plus, both of those may require the purchase of a TV tuner card and a Bluray drive, so keep that in mind.
4) If you have more than one obsolete rig, try creating an arcade of multiplayer games. Games like Quake and Doom 95 can run on practically any machine, even with some of the worst gaming cards ever created. If you have a relatively stronger card, Unreal Tournament is a very fun game to play, despite how old it is.
5) Make it a dedicated print/file server. The words "server" usually scares people away, but the process really isn't that bad. If you have a few printers connected to a few computers, consider connecting all the printers to your old computer and setting up a network to your newer machines via a router. This way, you leave one computer on all the time, which saves energy, and you'll be able to print from any networked machine to any of the printers.
The same applies with file sharing; just throw all of your hard drives on the old rig and turn on file sharing. Basically, you just right click a folder on the old rig and right click to "share," making sure you enable rights for other users to add/delete/modify files in the folder.
Any other ideas? Let us know in the comments.