Project Phoenix is DARPA's plan to use robots in orbit to pilfer the functional bits off of dead satellites to create working ones. It's one of the crazier ideas DARPA's put out there (in a while), and the agency looks to be totally serious about it. They've got this nifty video to prove it, even.
DARPA wants Project Phoenix to be in orbit and cannibalizing the dead to create the undead by 2015.
2015 is pretty soon, but there are already signs that DARPA is committed to the idea: this week the agency chose Honeybee Robotics to develop the arms that the Phoenix craft will use. With these arms, DARPA robotic spacecraft would both dock with and pull parts from a dead sat, as well as manipulate parts onto new platforms. Those new platforms would probably be smaller, perhaps less functional satellites — called "satlets" by the agency — that would perform narrow functions.
It's possible that the program will have versatility outside of plundering old satellite parts in orbit, which even aging parts from could be useful and cost-effective — Project Phoenix could also handle maintaining and improving existing orbital platforms.
Wonder what a mission would look like for the program? DARPA created the animation below to show how it could go down, and apparently had it narrated by a man talking into his cupped hands and his bored 10-year-old niece. Check it out.