• Install a bare-bones linux distro and set up a primal gateway.
    If that fails, install windows 98 and set up Connection Sharing. (To get over the slowness factor, imagine it's XP running on your Pentium III.)
  • Write a basic database interface and give it to a small business to keep track of inventory.
  • Set up a Telnet BBS
  • Set up a Dialup BBS
  • Donate it to the Red Cross or your favorite charity organization. Some Schools out there do run DOS and DOS browsers and would love to use it.
  • Get a TV out card and play Commander Keen and Wolfenstein. Can we say "Retro night"?
  • Find the spare change around your house, go to the flea market and set up the dream system of yesterdecade. =)
YES, I know most distros don't run on 286s. As Byzantine has pointed out, however, there is one that should. ELKS. (http://elks.sf.net). I know it's not Linux, but it runs Linux apps, it has the same shell interfaces and ergos, if you still wish to argue, get a life. Fo' shizzy.