mmx -- There are several good uses for that machine:
Add a little RAM, a floppy and Win 95, and you'll have a nice charitable gift for needy kids. There's a group home for autistic kids across the street from where I live. I set up a similar machine to them and gave it to them. It isn't very fast, as we would think of it, but if you add a 56K modem, all they need is a "lifeline" cheap phone line to get around the web and open up access to communications and information they would otherwise not have.
I don't recommend Win 98 or later for these machines. Even with the max RAM you could put in a machine of that vintage, they run terribly slow, and the HD won't hold much more than the OS, and most motherboards of that vintage don't support much larger drives without other buggy work-around patches.
Other than that, these old boxes make excellent DOS controllers for industrial environments, such as NC controlled machines. Some of those apps actually crash on faster machines due to timing issues. It would also make a decent box to learn Linux. Again, you may want to add a little more RAM for that.