The Linksys NSLU2 , a.k.a. the "Slug", is a small low cost network storage device from Linksys. Its main purpose is to serve as a network file server: on one side of the Slug, you connect one or two USB hard disks, on the other side your wired computer network at home or a small office. The disks can then be made available to that network, to computers running Linux, Mac OS or Microsoft Windows (and probably quite a few stranger platforms too).
The Slug can be flashed with a new firmware to make it what it essentially is: a small Linux computer. And from there, the sky seems to be the limit! You can use the Slug as a rather advanced backup station, it can be a web server (with PHP and even a database if you want), it can be a network monitor, it can run as a jukebox or a UPnP media server, and quite a lot of other applications. Have a look at Unslung and SlugOS for two examples of custom Linux distributions that can be installed on an NSLU2, or read about Debian/NSLU2 for details about running Debian Linux on the Slug.
In all fairness, it must be said that the Slug cannot run all those applications at once. After all, it is a small Linux computer. But it's a heck of a lot more than you might have imagined to get for well under a hundred bucks.