Every few weeks, we have to go through our marker box to rid it of dry markers. But we don't throw them away now, thanks to THIS post from Happy Hooligans!
Pull the dry marker tips out with some pliers (and the ink dispenser inside the barrel of the marker if you can manage it- some are too difficult to bother with). Sort them into cups by color (red/pink, yellow/orange, etc).
Add a little water and let them soak overnight and you've got watercolor paint!