3. Use your old PC + iTunes as a home media server
An old computer likely has a slow processor and not much RAM, but a setup like that is actually a good match for a media server's fairly low-key system requirements. The speed of the media server depends mostly on the hard disk drive and the type of controller -- if your system supports SATA and has fast hard drives, you can expect fairly good performance even if the processor is a bit outdated.
You'll need an optical drive to load music files onto the hard drive, an Ethernet card (or Wi-Fi capability) to connect to your local network to share the media files, and just enough RAM to run the media server. Usually you can get by with 2GB or so to run your operating system and one application.
The main advantage to setting something like this up is that you can keep the media server running at all times and have quick access to your files.
As far as software is concerned, I prefer Apple iTunes, not because it's necessarily the best media server or because it has extra features for sharing music, but because it's extremely well supported. For example, I tested the setup with a Logitech Squeezebox Radio, which found the iTunes files over my Wi-Fi network. Keep in mind that new software such as Sonos ZonePlayer S5 is more likely to support iTunes as a media server than are older apps.
Apple iTunes is also free, and it runs reliably.
It's also very easy to set up: Download the app from iTunes.com and install. Then load your music files. Now go to Edit-->Preferences. Click the Sharing tab and enable the "Share my library..." option. This makes your media files available to other devices.
One quick note about power savings. Your older PC probably does not have a recent Intel Core processor such as the i5 or i7, so it won't shut down threads on the processor when they are not in use to save power. You may want to consider an upgrade if the processor is not 80-plus certified, a rating that means the system runs efficiently and doesn't waste energy.
That said, you can set your media PC to blank the screen and power down the hard disk after just a few minutes to save power, a setting under Windows power management. Note that if you do make these changes, your server might take a few seconds to come back online when you try to access files.
Overall, the server was quite speedy in all of my tests and everything worked well -- streaming video files to my Sony PlayStation over Wi-Fi, running backups from a spare laptop and copying a large collection of music files. Note that my server did not support Gigabit Ethernet on the network card, but a simple upgrade would speed up file transfer speeds as well (if you use a Gigabit Ethernet router).
4. Turn any older PC into a gaming rig
Gamers know that the most critical component on any PC is a high-end graphics card. Without one, even if you have a fast processor and loads of RAM, recent games such as Aliens vs. Predator or Left 4 Dead 2 will still run slowly. The newer graphics cards are powerful enough and provide enough RAM to handle the pixel-pushing mayhem of just about any shooter, even if the CPU is a bit outdated.
I used an older PC that used to be a home server and still runs the Windows Home Server operating system, and added an AsusTek 8800GTS graphics card that's about a year old and has 512MB of memory. It's not a DirectX 11 card, which means it won't work with some of the very latest games (such as Battlefield: Bad Company 2) but it does support the vast majority of newer games.
This upgrade is fairly easy, but you'll need a power supply that has two six-pin PCI-Express cables, such as the ThermalTake Toughpower. That's because the graphics card is very power-hungry and requires the extra power cables.
To upgrade, first remove the old graphics card. Snap the new graphics card into the PCI Express slot and connect the PCI-E cables. You'll need the latest graphics driver for the card you use.
Now, you might wonder: Does this really work? Is a graphics card upgrade really enough to revive an older system? As a sanity test, I used a second old PC equipped with an older AMD Athlon processor and installed the same power supply and the same AsusTek graphics card. Then I tested the game Aliens vs. Predator. As most gamers know, you can quickly tell the difference between a PC that handles games well and one that's sluggish. With the card installed, the game ran smoothly and never had any annoying graphics slowdowns or frame-rate problems.
In fact, both systems ran smoothly -- I knew I could buy another GPU for the second PC and use it as a spare gaming machine. If the PC processor is older than five years, this upgrade might not work, however.