Well, M$ won't let you legally give 'em away with any M$ OS on the drives (the OS is not transferable and is considered to be irretrievably "linked" to the first PC it was installed on). MegaScrooge have prosecuted a number of would-be do-gooders who collected old PCs and donated them to schools, orphanages etc.
Suggestion to use them as Linux based routers (you don't even need a hard drive) or as file servers is good.
"Computers for schools have to be able to run current software or they can't be used for teaching." True for the official "curriculum" (which essentially teaches kids how to use Microsoft Office) but actually complete rubbish. There is a vast amount of excellent DOS based free teaching software out there for the picking - it may not have a groovy GUI but hey, you might actually have to think rather than click on the green fairy rather than the blue bunny. My kid is currently learning how to program on a DR-DOS based XT (he can crash it and stuff up the OS as much as he likes - it only takes 5 minutes to reinstall the lot. Another reason for dumping M$'s resource intensive piece of insecure bloatware.
VectorLinux is a small, fast, Slackware based distro that is optimised for older machines [P133 and above + 64MB memory] -
http://www.vertorlinux.com - worth checking out.
"VECTORLINUX 1.8 STANDARD EDITION.........$11.97usd (+s&h)
Released late 2000 Features the ultra stable 2.2.18 kernel This is an excellent choice for that dusty old 486 sitting in the closet. Has the XFree-3.3.6 gui and full development package. Recommend 16 megs of ram and 175 megs HD space for installation."