1. Web Server
2. Internet/email/Office
3. Music server
4. light iPhoto use
If you put $600-700 into it you could upgrade the CPU, RAM, HDD, DVD-RW and video card and it will be able to play (some) HD video, run iLife (iMove/iPhoto/iDVD/Garage Band) well and run games like Knights of the Old Republic and Call of Duty (and maybe Call of Duty 2 depending on how much you upgrade).
That will cost you about as much as a Mac Mini but has some advantages over the Mini in the realm of HDD options and video cards - but it will have a noticably slower CPU, FSB and RAM.
I love my G4 (see sig) and it's still my primary computer, but they're getting long in the tooth.