You can't talk about computer software and not cover games. Windows XP includes some games. Solitaire, Hearts, FreeCell and Minesweeper should occupy countless hours of your time, especially at work.
Nostalgic gaming is great, to be able to play the games from your childhood. Most people don't have their old game systems anymore, and you might have to search all over the country to find the classic Arcade coin-ops (or if you are mega rich, you can buy a replica). For the rest of us, there's emulators. MAME (Multiple Arcade Machine Emulator) can bring all the old classics like Space Invaders, Pac Man, Frogger, back to life. Street Fighter II? Mortal Kombat? No problem. Even some newer arcade hits are playable. I'm not going to link to any MAME roms due to their legal status (although is it still illegal if there are no other way to get the game?), but you can find those yourself easily enough.
It's not just arcade games that can be emulated, SNES, Genesis (Mega Drive) and even N64 emulators are also available.
A lot of the applications I've listed so far are open source, and there are even open source games. Some of these games are clones of existing games, and offer practically the same experience (and sometimes with less bugs). FreeCiv is an open source Civilization II clone, giving you hours of open ended gameplay. Similarly, FreeCol is a Colonization clone. Lincity-NG is a SimCity clone. OpenTTD is a Transport Tycoon Deluxe clone, one of my favourites. You can find a fairly complete list of open source games here.
Even when they are not open source, there are still some free games around. Propaganda aside, America's Army is the most famous, and whatever your politics, you can't argue that AA is a very decent multiplayer first-person shooter. Complete list of freeware games here.
Some commercial games are re-released later on as freeware. ScummVM provides an interface where lots of classic point and click games can be downloaded and played, games like Beneath a Steel Sky, Broken Swords 1 and 2. There is also BC3K, a saga of a game for the completely wrong reasons. Railroad Tycoon is now offered as freeware to promote the new Sid Meier's Railroads! game. A complete list of these types of games can be found here.
This guide only gives you a small sample of all the freeware and open source possibilities out there. There is really no need to buy (or pirate) software unless you have specific needs, and most users will get along just fine with free software.