I was recently the new hire in this situation... though I did have previous "real world" experience.
My boss and her surrogates would always say "play with the system" or "read documentation." I found this really annoying. I made up my own tasks, namely setting breakpoints I knew would be hit, and then doing a simple-yet-core operation on the system, and stepping through from cradle to grave.
As I did this, I drew pseudo-design diagrams of who was calling who with what -- basically, reverse engineering the stuff. Then I'd have one of the other devs sit with me and correct me while I dictated back to him/her what I believed each class's responsibility was and what it was doing.
Aside from that, if you don't have any meaty work for the new guy/gal, I'd try to invent short-term projects that aren't trivial busy work, but the experience of which will help when there is real work for him/her to do.
Of course, if there are short-term-yet-meaningful work available, start them on that. The bottom line is to give well-defined tasks with a goal. Otherwise, if they're like me, they'll come up with their own tasks and goals to prevent suicide from boredom.