In my Case Linux distributions have very poor support for the Radeon 9000 that is part of the AGP All-In-Wonder card I have in that system. The only desktop environment that works properly is XFCE; Same for my Thinkpad T41 with a which uses a mobile Radeon 7500 chipset.
That, and (again, in my case), I wanted both systems
specifically to run previous Windows versions.
Linux is certainly a better choice if "refurbishing" a system for less savvy users, however, particularly if the choice is between Windows XP and Linux, but even generally. I did put Linux Mint on the PC my uncle gave my parents. (A TFX Case Inspiron) The Hard Drive was still good, but the integrated graphics were corrupted and crashed the system, and while initially testing, wouldn't you know it, the power supply failed. I replaced the Power supply (TFX) and got a cheap, low profile Geforce 210 after confirming that the graphics problems were not merely the result of the original failing PSU. It's been running fine as far as I'm aware.
It depends very strongly on the user though. An advanced Excel or Word user isn't going to feel at home in the any OSS Office software, which for the advanced user are merely shadows of Microsoft Office.
With regards to XP in particular, when setting up the two old style systems, I came across some very useful software.
ViStart Gives XP a Vista/7 style start menu, including an integrated search feature, though the search seems more limited it tends to work most of the time.
Everything Search I've actually put on all my systems now. It's a ridiculously fast search tool that is able to search entire drives based on filename in seconds. I've used it to great success when I've forgotten where I saved a file but remember a part of the filename. It indexes even large drives very, very quickly and the search results appear practically instantaneously, and I've been quite impressed with it. I think it works by searching the Master File Table via it's service component, rather than accessing the disk drive via conventional File APIs, but whatever it does it works great.
I also tend to install "Royale Remixed" as well as the Microsoft Zune Theme on my XP systems. (I use the Zune theme alongside the sounds from Royale Remixed, personally) However my copy was downloaded so long ago I don't know if there are any trustworthy downloads for it now.