My dad had a slightly updated model of that mac IIRC. As I remember, it has a G3 processor and 128MB (stock) RAM. Might have a superdrive or a combo drive - not sure. Hard drives ranged from 10GBs and up, if I remember.
If it has some extra RAM and an external (or internal) extra hard drive, you can make it a decent machine. Not something to play the latest games on or use as your main work computer, but if you set it up in a corner or closet it would be just fine to act as a media server for iTunes or your files, etc.
It came with OS 8 or OS 9, but it is compatible with OS X (torrent it if you want...) up to OS X 10.3 I believe (maybe 10.4?) and that, while slowing it down some, will get you plenty more usability for the tasks I mentioned above.
It has Ethernet and my dad's had a wireless card, not sure if that one does too.
So in summary, buy a bit of cheap RAM, an external harddrive, and use it as a server or for those relics of mac games (marathon etc).
Don't just toss it, you can still put it to good use.
EDIT:
seems some of my specs were for a later model machine, the one my dad had. check the wiki article here
http://en.wikipedia.org/wiki/IMac_G3 and determine which you have.
