Kudos to this site and to your post - as an enterprise vSphere admin (VCP4, although ironically now I'm actually working for the competition), I was used to stellar compatibility and performance from IBM 3650 M2 servers with Nehalems, 64GB or 128GB of RAM, 12 NICs, and fiber attached NetApp storage.
But didn't really see myself buying that for the house.
So after much research, even though I was leaning towards the low end HP G5 servers many people were lusting after, I bought a used Dell Vostro 400 on eBay. It had the Core 2 Duo, 2.33 Ghz, E6550 processor with VT support, 4GB RAM (and room for another 4 GB), and a 160GB HD for $350. Still had the plastic on it.
ESXi 4.0 Update 1 installed perfectly. My only desire - I only wish it had a GB NIC, but those are easy enough to come by. I have a couple of P4 boxes I will use as open source iSCSI targets. I've got several VM's on it, including my vCenter server, which I'm not fond of virtualizing in production environments. I still split DCs and DNS servers so I have them on both virtual and physical servers. If you don't have DNS working and your virtual environment takes a dump, it's harder to recover from disasters, even if you edit the local host files on each host, although you should do that, too.
If I find another Vostro 400 deal, I might pick it up. I'm favorably impressed by the performance. Granted, it's not crazy fast like my hosts were at work, but it's incredible how well it performs for a home lab (it's a little I/O bound, but great with CPU and RAM).
But I'm open to other great suggestions in that price range. Thanks to all for the tips, and thanks for this site. I recommend it to all my team members looking for home lab help.