I have a machine I use for testing clients files, going to websites they have problems with and as an on-demand FTP server for them. I run XP Pro and basic apps. It's an old gaming machine of mine. Works great with IE6/7, Firefox, Symantec Enterprise AV, Microsoft's Antispyware, MS Office 2003, Acrobat Reader, Flash, VLC Player and a multi-codec pack. It's more than sufficient for running all those programs. I think i've turned it off maybe 5 times in the past 3 years. Only time it's rebooted is when an update required it.
I said nothing fancy... P3-700, 384MB RAM, 4MB Rage IIe built-in video, built-in sound, 200w power supply, 40GB IDE drive and DVD reader. I even have an old Winbook SI laptop (Celeron 650, 256MB, 4MB Rage IIm) that runs XP Pro just fine. I use that for testing too.
Sure, Office loads half as fast as my newer P4's and dual cores, but it's not my full time machine. Anything that speed or faster should be fine for a "kitchen" machine. Just don't expect to play games newer than 2002 on it
You can find parts and or whole machines in mini-towers and laptops all over ebay.
Oh, and look at Asus's EeePC line. They have some really nice micro PCs which would be perfect for what you want.