I use mine more than my iBook G4 for general stuff now. E-mail, light web browsing, and Adium mostly. I haven't gotten OS 9 re-installed yet but plan to soon. The extra RAM definitely helps, especially if you're using Tiger. If you can, a 5400 or even 7200RPM hard drive will improve performance as well. Those stock drives are painfully slow - the first drive in mine croaked and was replaced under AppleCare. I guess it depends on how far you want to go, because even with those two upgrades, it's still a G3.
If you use Safari, get ClickToFlash (http://rentzsch.github.com/clicktoflash/) - it has helped me immensely with the beachballs.
Hope this helps.
