One of the best cheap hacks I have seen, though it might not really be considered a hack, is using MSI Wind PC (now called MSI Wind Nettop) as a home server and media server.

The MSI Wind PC which can be found online for ~$150 and comes with a motherboard with built in VGA, sound, NIC, cpu, case,  and power supply.  The power supply is external, the cpu is an Intel Atom, the case has a place for an optical drive and a 3.5" HDD- both are SATA.  The memory required for the board is laptop memory (DDR2 200pin).  The motherboard also has a CF card reader on it, but you must remove the motherboard to insert a card.  This would only be handy for installing your OS to it or using it as a backup.  The front has a place that will accept SD/MMC/MS/XD which can be handy.

I set mine up with a 500GB SATA HDD, and 2GB of memory.  I hooked a SATA optical drive up long enough to load the OS.  Note:  One could probably get 3.5" HDD rails and mount a 2nd HDD in the Optical Drive Bay (5.25").  The OS of choice was Ubuntu 8.04 LTS.  Installation went smoothly and all of the hardware was detected.  I setup samba to share with windows computers, gave it an IP and it works flawlessly.  I have all the data mirrored to an USB external drive in case of drive failure.  All of this for a home server for ~$225.  It uses far less power and is a lot quiter than my previous server-on-its-side implementation, plus takes up far less space.  I don't/won't use Windows, so you'll have to find a review with that OS on this box elsewhere. 

I did build one of these without a HDD, installed Ubuntu on an 8GB CF instead, for a friend that just wanted it to browse the Internet.  It works great for him and he has plenty of room to store documents.  He can always add an external HDD to store pictures, movies, etc. should he desire.

Note:  All names used are registered trade marks of their respective companies.