What I would do if $N dropped into my lap in some legal non-taxable (or post-tax) way:
$10: Keep it in my wallet, most likely.
$100: Spend it on books, or maybe Lego, or maybe Bub.
$1000: Put it in our bank account (mortgage offset) and decide what to do with it (maybe some work around the house).
$10,000: Put most in the bank account, consider new bike or laptop or books or Lego or Bub stuff or stuff for the fencing club.
$100,000: Pay a chunk off the mortgage, maybe keep a bit for house improvements etc. Also consider seeding a permanent venue for the fencing club and serious advertising to boost membership.
$1,000,000: Kill the mortgage ! And plenty left over for serious home improvements (I've been thinking that it would be cool to have a proper observatory dome on the roof :-) ), and to invest a chunk in a safe/reasonable investment (which would probably mean an investment property).
This is the first level that could bring major lifestyle changes - I could change jobs to something a bit more interesting than the IT side of the financial industry, rwrylsin would be able to do more fencing work (especially if I was able to work from home most of the time).
$10,000,000 (and above): All of the above, and I'd never need to work again. I imagine we'd work on a permanent home for the fencing club, regular travel to see family and friends in Oz and overseas, and hanging around and enjoying ourselves.
(I sometimes think about this while riding to and from work (good thinking time, when the traffic isn't trying to squish me), and figure $2-3m would do the trick quite nicely.)
Original post on Dreamwidth - there are comments there.