Finally I was able to read somewhere in the candlepower forums the process of reviving a low performing NiMH batteries using a dumb charger. Unfortunately I lost the link... but I do remember the method since it is similar to the "break-in" function of smart chargers. However it is a time consuming process:
1. Get a slow dumb charger that has a charging rate of 0.1C of the battery you are trying to revive. So if you are reviving an old Eneloop 2000 mAh cell, use a dumb charger with only 200mAh charging rate. To compute the charging rate just multiply the capacity of the battery (2000 mAh) with 0.1 and you should get the desired dumb charging rate.
2. Make sure to normally discharge the battery first then charge it with the dumb charger for 16 hours. It's ok to exceed the 16 hours charging time by an hour or two since the 0.1C charging rate should be low enough that overcharging will not damage the battery.
3. After 16 hours charging, let the battery rest for an hour or more. Then discharge the battery using a low power flashlight. Check the voltage of the battery once in awhile using a voltage tester and make sure it does not go below 0.9 volts when discharging. If the voltage goes way below 0.9 volts (like 0.5 or 0.4) for extended periods it can damage the battery further and reverse polarity might happen.
4. Repeat steps 2-3 until the performance of the battery returns to a usable state. Of course it will not perform like a brand new battery but if you can still get 70% or 80% of the expected capacity of the battery then at least you have salvaged a once unusable battery. Otherwise if the battery damage is too severe then might as well chuck the battery in your wall clock or TV remotes hehe...
I have not tried the above personally, and it is a time consuming process, so I would say "try at your own risk" :-)
A very good but affordable smart charger is the Sony BCG-34HLD AA/AAA NiMH Charger:
BudgetLightForum - Sony BCG-34HLD AA/AAA NiMH Charger Review
<click here for link>