These are great to set up your pagefile.sys (fixed at 4096) on desktop XP systems. Also I have used them as Photoshop scratch disks as well or to store backup apps etc...
I forgot to say as a slave drive. I agree, you can bearly fit a modern OS on a drive this size but it is great to page/swap/scratch files on. another good use would be to put your CD/DVD burning temp folder on. All of these things slow performance if they are on your system drive.