yeah linux can breathe new life into redundant hardware. I have my very first pc, a K6-2 300mhz with 200MB of pc66, running as a router / internet host with it's pci slots filled with network cards.
Thanks to Iptables it has the most configurable firewall, it routes traffic, it runs the local mysql database server, a rather spiffy Squid transparent-http proxy for all clients without desktop config required, a secure internet present email server, another server for pop3/imap access, a very large windows network drive using Samba, the same drive rooted to an (s)ftp server, and also runs Mldonkey for http/bittorrent/ed2k/fasttrack/directconnect transfers. I expect i missed a few other things out too.
It runs all that on a 300mhz with only 200mb of pc66 ram, and it's not even pushing the system.
Of course i run it without a gui (or monitor or mouse or keyboard or any other peripherals at all, god bless SSH). I actually set the box up over 3 years ago, and haven't had to mess with it since, aside from apt-get updates for security. The distro is debian btw, an excellent server distro.
I also boot my desktop pc with debian pure64 sid/experimental, but debian is hard work as a desktop, you either use older well tested program versions, or using the testing versions of debian and help work out bugs in the latest and greatest program versions.