I have an old Dell Optiplex 755 SFF (Small Form Factor) that is one of my favorite PCs.
You can get one like it here, for about $180... http://cgi.ebay.com?ViewItem&item=300644713361. Mine has a 300GB hard drive and 4GB of RAM (All easily and cheaply upgradable).
On Saturday (Dec 31, 2011) I was attempting to install Ubuntu 11.10 on it, but I couldn't boot to the install DVD. I had downloaded the correct Ubuntu image, and burned it to DVD on my Intel iMac (OSX Lion). After the burn process, it verified the disk and everything appeared ok. The problem was, it wasn't bootable. After wasting a few hours trying to make the machine boot from a "bootable" DVD, I gave up, threw the DVD away and re-downloaded the iso (just in case the old one was corrupted). After I re-burned the disk, it installed flawlessly. Now I have a super little *nix box for all sorts of cross-platform testing.
If you are looking for a super-cheap, yet super-capable home computer, I highly recommend surfing EBay for a Dell Optiplex 755 SFF or USFF (Small form factor or Ultra small form factor) PC with an Intel Core2 Duo or Core2 Quad. Ubuntu is a free and open-source operating system that is supremely powerful and very well supported. I have been using Linux (and other unix/POSIX Compiant operating systems) since the mid ninteties, and this is the first time I am prepared to recommend them to the masses for normal every-day use.
Ubuntu 11.04 and above, introduced the Unity UI. While those of us well-versed in Linux/Unix operating system operation may cringe at such a simplistic user interface, regular people (ie my mother and my wife) were completely perplexed at the complexities of Linux. Unity brings the simplicity of the Apple Mac OS to the free Linux operating system and inexpensive commodity PC hardware. Linux experts may still opt for a more powerful UI engine like Gnome or KDE. The powerful Linux operating system underlies all of these UI implementations, and the choice of which UI to use is completely at the user's discretion; so I am perplexed at the backlash Unity has received from the Linux community.
If you have ever wondered what it would be like to use something other than Windows, I highly recommend that you download the most current version of Ubuntu Linux and give it a try. If you are download-and-burn averse, then you can order five Ubuntu DVD's from Canonical for about $8 here http://shop.canonical.com/product_info.php?products_id=915
Booting your PC to the UBuntu DVD allows you two options.
1. Blow everything on your PC away and install Ubuntu in its place (like I did).
2. Boot to the Ubuntu OS on the DVD and run Ubuntu as an experiment. You can use your computer normally, running Ubuntu; and when you reboot. you'll be back to Windows with nothing damaged or changed.
I'd suggest running it in the experimental mode for a while until you are used to the way it works, then ... after backing up your important data (using an offsite service like Mozy Pro or Carbonite) Take the plunge and wipe your hard drive in favor of Ubuntu Linux.