Learn Uses for an Older computer to reuse it.
Your computer is too old to be usable as your daily computer which you use for running newer software. The best use for an old computer is to use your older computer to install a copy of the Ubuntu Linux operating system on it. I personally use Ubuntu Linux on some of my home computers on a daily basis.
The System requirements for Ubuntu Linux is a 1GHz CPU, 512MBs of RAM, 5GB of free hard drive space, and a monitor resolution of 1024x768 pixels. Most older computers made in the last 10 years should have these requirements.
I recommend you get Official Ubuntu Book, The (5th Edition) to learn more about how to Install, update, and use Ubuntu.
Ubuntu user interface is similar to most other operating systems like Windows. Plus, it can run a lot of common files you can run on Windows like Firefox, OpenOffice, VLC media player, chat programs, and e-mail clients.
The main benefit of Ubuntu is it is free, and easy to install on most computer systems in my experience. Plus, you are less likely to get infected with a virus, and have as many problems then Windows since Ubuntu is maintained by many programmers.
Ubuntu also come pre-bundle with most programs that you need like an Office Suite, Web Browser, E-mail client, media players, chat programs, a few games, dictionary and more. It is also easy to install new programs to Ubuntu by using the Ubuntu Software Center.
With Ubuntu Linux, you also have the option of installing Ubuntu along side Windows Operating Systems like XP, or Vista on the same hard drive by using the Windows Ubuntu Installer program on the CD, or setting up a dual boot computer during the Ubuntu install when you start your computer from a CD.
Ubuntu is a good alternative operating system when Windows becomes unstable because of a virus, or other operating system or software related problem since Windows problems won't cause Ubuntu to become unstable even if Ubuntu is installed on the same drive or computer as your Windows Operating System.
A lot of other websites recommend that you turn your old computer into a firewall, file server, multimedia computer, etc. However, you can do these tasks in Ubuntu, if you installed the right software for Ubuntu on your computer. Using an out dated version of Windows can be dangerous since there maybe no new sequrity and bug fixes being published by Microsoft.
You can also sell your old computer on Craigslists, or Ebay but make sure to securely delete sensitive data of your hard drive first, or replace the hard drive with a new one to sell.