The best thing I could recommend with breathing life into an old notebook is installing some flavour of Linux.
I installed Ubuntu on an old Windows 7 notebook that was virtually unusable, and it is now a really very nice surfing/light duty notebook and an excellent media centre computer.
I know it sounds a bit radical, and I expect you won't try it, but it is easy to install and it's light enough to be very functional on an older machine but still rich enough so that it offers a very nice, easy user experience.
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