My white 2006 iMac running Snow Leopard is still fast enough for running IMAP emails with Gmail, and also plenty fast enough for general web browsing. These two functions are the bulk of daily tasks for most people.
Where the old iMac slows down is using modern apps that need faster processing speed.
Mine's a print server, does Boinc stuff and is a backup iMac in case of problems with the primary. It also runs the scanner part of the allinone printer because I can't be bothered to try and work that out wirelessly as I only scan once in a blue moon. I'm wondering whether it's time to reclaim the space and donate it somewhere
My 2010 iMac (i3 model) is used exclusively as an iTunes/music player now. It doesn't even host the files itself, instead it stream them from my main PC.
My iPad see more use than my iMac these days. I was thinking about buying a new one, but I have a problem in spending +2k on a computer, especially a AIO. I understand that the new 5k screen is fabulous, but since I'm only an amateur photographer and digital artist, i don't really need it.
I use a 2007 Mac Mini at home as a print server, and it has a VM with backup surveillance software that I use in case my main surveillance system goes down.
I use a late iMac 2009 at work using target display mode as the main screen on my pc desktop. I also use it for remote controlling my Macs at home, and the same scenario with the VM with the backup surveillance software.
I never sell old macs, either get them to family or repurpose. iTunes server, XMBC server, DNS, ProfileManager, Git, SVN, and also they are great for hosting VirtualBox VMs.
I just found a home for our late '09 iMac which has not been in use. It went to a woman who does not have a computer but wants to try her hand at graphic arts again. She was very appreciative.
Post-Script: it still runs great. It was one of the iMac that Apple replaced the original Seagate 1TB drive, so the drive is younger than the machine.