Twice now I've captured the goblin "Master" - the leader of the nearby civilization. The first time I stripped her and put her in a glass-walled danger room in the middle of the meeting area. I figured it was fitting both for her (in legends mode she had a most impressive history) and my nobles, in the "I can deconstruct this wall if you make unreasonable demands" sort of way.
Right now I have the goblin master in a simple cage in my meeting area, although I didn't strip him first. I put a toad, a rat and a cardinal in the cage with him, for a Bird-goblin of Diamondrelic vibe. My dorfs throw parties around his cage all the time.
Other than that, I have about 500 bodies/skulls of killed enemies in a refuse stockpile at the entrance to my fort so that I can raise the bridge and force anything incoming (migrants, merchants, invaders) to go through the stockpile before they get into the fortress. (If they can get past the traps first, and then it opens directly into the barracks...) I periodically go through it and make sure there are no bits in there other than skeletons and the occasional heads/skulls, marking anything else for dumping into magma. I'm going to have to expand the area because it's just about full.
edit: For some reason the kids like to play in the boneyard... morbid little bastards...