Great advice from the Make blog on what to do with an old useless PC (I actually have one at home that qualifies perfectly for just that ;):
Here's a great article about turning that old PC in to an internet-enabled CD player, DVD burner, and MP3 jukebox using Knoppix. I get asked about this a lot "What can I do with an old PC" and this is a pretty good use and Knoppix is a great way to get started.
" I have the perfect test subject sitting in my scrap heap: an HP Pavilion. It was a decent PC in its day: 350MHz Pentium II processor, 128MB RAM, 3GB hard disk, and a DVD drive. I'll assume you're in the same boat.
The secret sauce we'll use to revitalize our elderly PC is Linux, the free operating system based on UNIX. Linux is available in more than 300 varieties ("distributions"), enjoys plenty of online support from around the world, and comes with a truckload of applications, including free CD/DVD players and recorders. (Did I mention "free?")"
(via O'Reilly Digital Media)