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You might pair it with a webcam and some motion-detection software and use it for home security or monitoring. Keep a UPS attached as well if the laptop's battery is dying. With the idle CPU you could use it to do some Folding@Home stuff. SSD is still pretty pricy, I dunno if I'd go with one yet for an older laptop, but maybe try to get the highest-speed hard drive supported by it and max out the RAM as you're thinking.
Well, I shopped around, and as with any gadget, I convinced myself I wanted a good one. I compared prices and ended up getting the Logitech Quickcam Pro 9000 as you'd recommended.
Thanks for the help!