We all know that you can make thin clients for free out of all those junky computers in your classrooms, closets, server rooms, and wherever else you can stash them. Just a bit of effort and some surplus hard drives later and you're in business, regardless of your server environment (LTSP or Windows Terminal Server). Why spend $500 a piece on dumb terminals, circa 1978?
Well, I would hope that you wouldn't. Perfectly nice dumb terminals can be had for closer to $150 or $200 from HP and other major OEMs and they can be built quite easily for less (see George Ou's article Unbelievably cheap mini-PCs from E-Way). It's here in this sweet spot of sub-$400 (with flat panel, mouse, and keyboard) that these dumb terminals stop being a little less dumb. To call them dumb terminals in the first place is a bit of a misnomer. These little guys usually have some sort of operating system (maybe a custom Linux distro, Win CE, or XP Embedded) that handles display tasks and connection to a server. It may even have some very very basic functions (e.g., web browsing) built in. These aren't your father's dumb terminals and they can provide a fairly rich graphical environment via LTSP, Citrix, Windows Terminal Services, or other spiffy server-centric technologies.
I still haven't given you a good reason to actually purchase one of these little buggers, though (much less 100 of them). There are actually a couple of good reasons, though. The first is OEM support. Warranties and technical support are great things, no matter how savvy you are. When a fix is a phone call or an email away, that saves you time and money. But, "P-shaw," you say! I have so many half dead PCs stacked under my desk, I can just swap one piece of junk for another if one of my homegrown thin clients craps out! True, but how much are you paying to recycle the now really-for-sure-never-to-be-reused dead PC you just yanked out of your lab? And did it come with software to automate setup? And manage connections? Probably not.
Here's a much better reason, though. This one appeals to the tree-hugging former Seattleite in me and certainly appeals to the bean counters here in New England where energy costs continue to go through the roof. Thin clients have few, if any moving parts (fans, hard drives, etc.) and use a tiny fraction of the electricity consumed by PCs. In fact, while the typical PC uses about 95 watts of power, thin clients may use as little as 5-6 watts. Multiplied by 100, 200, or even more terminals across an enterprise, and this can result in fairly substantial savings (at even 10 cents per kilowatt hour, 100 thin clients can save on the order of $20-$25 per day). Even cooling costs can be reduced using dedicated thin clients as they generate much less heat than converted PCs.
For the same reason, true thin clients are virtually silent. Ever walked into a room full of turn-of-the-century PCs? It's a little loud, especially for a classroom, library, or media center setting. Thin clients (the real kind that you buy) lend themselves to educational settings like these.
I love free stuff as much as the next Ed Techer. I'm an IT guy working in an old mill town...If it's not free, I usually don't get it. However, a real case can be made for actually paying for thin clients if you are looking to roll out server-based computing in your school.