This blog has a good post about what to do with your 401K once you leave an employer. And that is a question facing more and more people these days.
You can take it and spend it. The WORST possible option. Really you should only consider cashing out if you are over 59.5; to pay for medical treatment against some life threatening problems; Tony Soprano is after you. And if Tony is just going to break your legs, you might want to think about going that route.