I'm sure everybody already knows you can run Linux/NetBSD on a Dreamcast, turning it into either an internet browser, or more ambitiously into a firewall or SSH tunneler. IIRC somebody managed to wire a hard drive to one of the systems through maple bus, which is pretty darn impressive.
There's also
this, of course. It's only possible on the old version PS3's though. But yeah, Ben Heck is pretty awesome.
My PSP has the Pandora Battery mod, which is technically a hard mod. My PS2 is modded to be able to play imports/burns using swap magic, which basically only required getting the disks and then jamming the lid sensors down. I don't even have a DVD burner though, haha.
Pretty much everything has been modded though. I used to lurk on the portables of doom site, and was considering trying to make a portable N64 or Dreamcast using a Game Gear with hacked tv tuner for the screen, but I didn't have anything to use for a case. Also, the infamous Nintendo screws. Ugh.