Two other threads got me thinking about this. I recently received a replacement bag, but the old one was still usable.
Another poster keeps the old bag for spare parts (wheels), which I think is brilliant!
I donated my old bag to the Campus Minister at my college, for students going on Alternative Spring Break service trips. I have donated other bags (too heavy or too big for packing light) to homeless shelters, or emergency relief efforts.
What do you do with your old luggage?