My family tends to be very good at recyling old PC equipment...
Here's the stratedgey:
We have 12 computers in our immediate family (6 people, 2 households) not including my Mom's boyfriend who has about 5 apples and 2 PC's... They range from a Celron 2 all the way up to Athlon 64/nforce 4 chipsets, and a little of everything in between (all AMD except the Celron, and one laptop)
So no matter what part is being upgraded, 99% of the time, there is another computer in the family for which the part that was replaced will still be an upgrade, it's trickle-down economics at it's finest.
When our parts bin gets to the point where we can assemble (or almost assemble) a computer that wouldn't fill/serve any higher purpose, we either give it to extended family that will take what they can get/don't need much... or we donate it to charity... Nothing is ever really wasted, unless it's fried...