i would put FREESCO on it, running it at home here, its very good, keeps all the script kiddies away from my network and you can setup samba on it and then use it as a small dump for important files you dont wanna loose in a crash.

FREESCO can also run from a single disk, but when you cant really expend it. Then install a telnet or SSH deamon on it and you can use it as a almost normal shell based workstation.
Dont forget the FEESCO comes very incomplete, no GUI, no compiling software, no ftp server no notheng, but with some tar packages and a brain you can make a great system out of it