A super lightweight Linux distribution that checks in at just 50 MB might give old hardware new life. Check out the new update of Damn Small Linux.
DSL has a nearly complete desktop, and a tiny core of command line tools. All applications have been chosen for the best balance of functionality, size and speed. Damn Small also has the ability to act as an SSH/FTP/HTTPD server right off of a live CD. In our quest to save space and have a fully functional desktop we've made many GUI administration tools which are fast yet still easy to use.
Applications include the Firefox, Dillo, and Netrik browsers, FluxBox window manager, and Sylpheed for email. You can see the full list of what they have included in DSL on this page.
And why would you want a 50 MB OS? If you have some old hardware lying around that you can't quite bear to part with, this distribution will run on it — minimum requirements are i486 with 16MB of RAM. What it may not run on is new machines — it uses the 2.4 kernel, according to the developers, because it is considerably more lightweight than 2.6. You can also run it inside of Windows.