We've already mentioned that many open source packages can run quite ably on older machines. Schools rarely have the money to buy the latest hardware but frequently software upgrades require hardware upgrades in order to perform reasonably. Many businesses regularly replace older machines with new in order to keep up with their software's hardware requirements. These machines are usually in good working order but in the Microsoft world they're essentially useless.
The Linux Terminal Server Project (LTSP) helps side-step this problem. LTSP allows labs to be deployed with most of the machines as diskless workstations which boot from a network server. By using LTSP a school can quickly increase the number of available workstations for students without a large expenditure on hardware or software licencing. With LTSP in place, a few faster machines can be configured as servers perhaps one per lab. If there is adequate hardware available, it is possible to set up networked home directories. Users would effortlessly have an office suite, email and browser.
Using LTSP lowers the cost of administering the machines too. Instead of a setup with 100 individual computers spread over 4 labs which each need to be kept up to date and secure, LTSP reduces this to 100 workstations but only a 4 servers that need to be kept up to date and secure.
The benefits of using such a system has many benefits to the school. There is an significant increase in available workstations, student accounts move with them from machine to machine and are managable from afar, administrative costs for software updates are reduced, due to centralised control and virus updating there's much less risk from viruses and worms, software licencing and hardware costs are reduced and donated equipment can.