If you have a few rotary phone spare that can't be restored, you can always use the dial for a different form of user input. Instructables user guidomax has done just that, by documenting how to remove the dial and measure the pulses generated from the mechanism when dialled with an Arduino. From this point you can then do almost anything depending on your requirements and imagination. For example, sending tweets.
An interesting hack might be to embed the board inside the telephone and get up to some mischief. To do this, consider embedding the Freetronics LeoStick. Apart from being one of the smallest Arduino-compatibles on the market with USB, it also has an onboard RGB LED and piezo for sound effects and knock measurement: