I can't beleive that people would call old hardware like that "useless"... especially for someone who might just want to get some work done away from their desk, the laptop is just as useful as the day it was made. Put it up on EBay or in the classifieds, and you could get $50 out of it, no problem.
If it was me, I'd keep it, add a PCMCIA wireless card, dump Win95 and load a lightweight Linux distro. It could function both standalone for E-Mail and web browsing and as an X terminal to my main box for heavier applications. Another idea would be to add both a wireless card and a USB sound card to make an instant network MP3 player for your home stereo. With a color screen and a nice GUI! Or you could just load it with a bunch of old console emulators... add a cheap VGA->NTSC converter and you've got a tiny box next to your TV containing all the vintage arcade games you could ever want. You just have to be a bit creative - there are lots of uses for a miniature pentium-class PC.