Does anyone know a good use for an old hot water heater?

You can strip the tank out and make a solar water heater out of it and scrap the rest.

 

Depends on your ambitions, the condition of the hotwater heater and type. The skin is sheatmeatal, the tank is just that, if it's not a leaker and its cleaned out it is a container, cut in half its a trough, cut up and welded back to together it's a wood stove...
Electric hotwater heaters have heating elimentery that can be repurposed, and lacking the flue up the middle make better tanks

 

As a whole, it's garbage but save it for future use. You can use those parts as scrap for new projects.

 

You could strip it for spares and projects or scrap it properly and get cash for the aluminium, steel or copper. Last year I earned an additional £2000+ from just a few trips out scrapping/recycling junk metals.

 

The majority of used water heaters have failed & leak water. So repurposing as a water container is low on the pole. If the internal corrosion is extensive I'm not sure if you'd want to waste time on it. If it's a gas unit I could see some use for those parts in other projects. Unless you have a massive solar PV farm, the electrics will be near useless because of the power consumption.

 

Leaks can be fixed once you strip off the sheet metal and insulation. Then the tank can indeed be used for a lot of things as mentioned above. Another use for them is as a reservoir to add to your air compressor to give it more volume. The tanks can be used as just that, water storage. Filled with sand they will stop a bullet. The gas ones can be stripped down and the burner used on an out door fryer. The electric ones have some fairly heavy copper wire that can be salvaged easily. Cut them in various ways and you can use them as BIG pots for cooking on an open fire.