Ive never done it myself, but I have a good friend back in Saskatoon (my home town) who colected junk bikes and components from dumpsters, back alleys ect.. over a period of about a year.
after that we invested about $100 at the LBS (they even cut us a deal when we told them what we where doing) took the salvaged parts and built him and his 2 boys good rideable bikes, With the leftovers we built 6 more good rideable bikes and donated them to his church to be given away to thoes who needed em. It was alot of work, but very rewarding.

cheers
Snoop DuJour