I'd say for the specs of the machine, I'd go with XP all the way. Now I'm not one of those that bashes ME, it has it's place even with it's faults, but for YOUR system and specs, I see no reason to use it. As to win 2000 and others, I used win 2000 professionally as a cad platform when it was first released, upgrading from NT 3.5 and NT 4.0. It was WAY more user friendly than NT ever was; NT seemed not to allow you to do anything, you searched and searched through menues and options, but almost always came out short. Win 2000 ended that, gave you almost as much freedom as you had in win 98. It's main shortcomings was LONG boot time with the hardware at the time of release. ( Pentium 300 Mhz, 128 Mb ram, in my case.) Main advantage over win 9X at the time; stability, not needing to reboot frequently through a days work. As was the case with NT. 9X family had at the time way more compatability with programs, games, hardware etc. That is as of now fast swithching over to the 2000/XP side. Small memory footprint of the 9X family is what makes it still interesting to use. In my personal case, I just got an old lapop for free; 266Mhz, 32 megs ram(max 128Mb), 4 Gb disc, win 98 FE. On a machine like this, I'd never consider win 2000 or XP. They simply make it so slow you start want to kill yourself, or the machine. For users looking for a somewhat fresher look than what win 98 has, I'd say ME has it's place. I personally consider to upgrade this laptop (I'm writing on now) to ME. I also have a workstation running XP with all the bells and whistles, but I'd still want to put this old laptop to good use. It was never usable for workstation duties from the beginning anyhow, I just want to preserve the use it has always given it's owners from day one, with a bit fresher look to it. I have had ME installed in the past on old machines, and it works well if you just go through the quirks it has and shut off a few things. IMO compared to 98se, ME has alot more installed that would need to be additionly installed on a 98 platform, like pic viewer, better usb support, tweak UI etc. I started out with a commodore 64 in my early teens, and have gone through ALL windows editions from win 1.0 through vista beta. For older hardware like mine, ME has it's place. Besides, I just want to use it as a coffee table machine to get online whenever I feel the urge to read up on somwthing, or get movie tickets or whatever. It would handle these duties with ME very well I think.