I underclock the server that I keep in my closet. Why? A lower clock alone consumes less power and produces less heat, but this also allows me to lower the voltage which pushes power consumption and heat production even lower. This of course wouldn't be a smart move if I heavily taxed the server, but I really don't.
If you are wondering what I am running, it was my former gaming PC parts (Abit AN7, Athlon XP Mobile 2500+, 2GB DDR400 RAM), my old server drives for the OS (2 160GB IDE drives in RAID 1), and new drives for storage (4 500GB SATA drives in RAID 5). The CPU is supposed to run at 14.0 x 133MHz but I run it at 7.0 x 200MHz. I only underclocked it 487MHz, but the faster FSB helps more than the higher multiplier so I really didn't lose much and I was able to drop the voltage 0.23V. Does 0.23V sound insignificant? Stock is 1.45V, so effectively I dropped it about 16%.
I didn't even see how low I could set the voltage and still maintain a stable PC because I was in a rush so I'm sure it could go lower, but hopefully you can see why someone might do it and a situation in which it is practical.