Running linus is actually a big issue with the xbox. Since it has a pentium 3 733, 64mb video card, and can have memory added to it (older versions), and only costs 150. So, i am not sure if you meant a PC running linux, or xbox, but context would apply that you meant for a PC.
http://www.linux.org/
As for what you can do..
Free OS, play games if developers allow support, browse the net on a free internet browser (internet not free), read emails for free, use programming tools that are free...and don't suck. However, stability may vary with versions. It is just a free alternative to windows.
edit: oh, click the general info option.