"What can I do with an extra PC?"
Multitudes. Myriads. Mucho.
Here's some ideas, one or more of which may have already been noted in this thread by others.
File and backup server -- Whether you use an extra Win XP, VISTA or even Windows 2000 Pro license -- you can build a server system (and consider a RAID5 disk array for data integrity.) You would need to create a household LAN, share folders on the server, and give access to the shared folders for your main workstation and other machines. In my setup, I have regular, scheduled backups going to the server from my workstation, and I periodically back up the server itself to a hot-swap drive -- two levels of data protection.
DVR -- Already mentioned.
Home Control -- I haven't dabbled in this for several years, but you can control household lighting and link security cameras to the computer.
And of course there's probably more, like building your own web server, etc.