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What are people actually doing with tiny pcs that require much computing power? I use one to serve a dashboard on a monitor at work, but haven't done anything else with them.
Playing video, usually (not a coincidence that the demo video is using XBMC).

But on a more general note - if you can get quad core for $35, why wouldn't you?

How much cheaper would it be to get less power? Would it actually be worthwhile to find such systems, if you found that one first?
HTPC has been the most common use I've seen. I use my Raspberry Pi to run XBMC. It gets the job done although the menu can be a little sluggish; I've been thinking of upgrading it for awhile.
what version? B+?
Yeah the interface for XBMC struggles on a B+, though playback works fine.
Just a regular B, actually. I bought it before the B+. The B especially is something of a struggle with its two sole USB ports. I use one for the wifi adapter, and the other to plug in my external hard-drive. I have to control the program entirely via my phone, since I can't plug in a keyboard or an IR adapter.
I use mine as a VPN gateway, web cache, media streamer, and source code repository. Sometimes I even use it as a pleasantly-silent desktop, since it's on the same stand that holds my monitor and keyboard/mouse. Because it's right here in the house, latency and bandwidth are great. Because it consumes so little power (even with an external 2.5" disk drive attached) I don't worry about leaving it on all the time. It's just a good do-everything workhorse, that also happens to be small enough that I could toss it in a bag and take it on the road with me if I felt like it.
Image processing from multiple webcams with a database backend.
Thank GOD someone posted this after everyone lost their fucking heads at the Intel stick yesterday.
I don't mind the odroid, but I would love it a lot more if there were some official Debian images for it. The software side of things is lacking a little bit.
Would it work as a home server ? Uncompressing rar set, downloading from newsgroups etc?