I have an older desktop for this purpose. It has both Win98 and XP installed on it and has twin hard drives, it's actually still on the wired network at the moment, as I only switched to wireless networking the other day so that the laptops we have could go online, so I've not got around to putting something in that one for it to receive stuff wirelessly.
It's handy as a large back up device and it's also good in a pinch if the main desktop goes down or your keyboard explodes or whatever, as it does have a reasonably decent AGP graphics card in it and a fairly okay processor at 2.8 Ghz. Also handy to run older programs that will not run on XP if you boot it up in Win98. The one thing to be aware of is that if you do stuff like that, it is likely to be a weak link in your anti-virus chain, so watch out for that. Other than that minor caveat, I'd recommend doing that sort of thing to anyone, as if you get a main PC meltdown and you don't have a laptop, it's a good backup system while you sort out your normal use PC.
@ Kiwi: Your motherboard handbook (if you can find it) should tell you in the front few pages what the beep sequence signifies. Normally it is not a good sign, but it may just be a loose connection or something as simple as the battery telling you it's on its last legs (a not uncommon problem when reviving old banger PCs). If it won't crank up on the default BIOS settings, it could mean it's breathed its last, as a last resort a BIOS reflash might work. In rare cases, a virus can reconfigure the BIOS, so be careful before you pop it on a network to your good stuff.
Chock