Blogs provide a great way to engage students using technology. Whether posting assignments or showcasing class events, blogs using Blogger are free and relatively easy to set up and get going.Photostory is a great program that can be installed on all computers, but if it preferable to use a service that allows you to communicate with a much broader audience and house digital stories, take a look at Voicethread. Accounts are free, and we have several teachers and schools in our district using this with students. If you need a kid-safe search engine, we have a district license for netTrekker. You can also use DEStreaming for finding digital media that we also have a site license for. If you want a way to organize bookmarks try delicious; for organizing RSS try out Google reader. If you'd like to videoconference but don't have a big budget, see if you have a projector and webcam in your school, and use Skype (part of the Creating Global Connections workshop). If you need to collaborate with a group in a website set up a wiki.
The great thing about using these tools is that most are web-based and don't require installation. So start working on that technology-rich classroom, on a budget, with some of these free and worthwhile options.