I use System Commander, which allows me to run multiple OS's on the same PC. Right now I run 98SE and WIN2000 Pro on the same partition on my development machine, and it worked great until I tried to upgrade to IE6. It appears you cannot run two copies of IE6 on the same partition, so I'm back to IE 5.5 again.
My server machine runs WIN2000 Adv. Server and Red Hat 6. The Win2k install serves mostly as a database server running SQL Server 2k and the Lnux install is just for playing around.
Anyway, given the choice of one OS only, for me I would pick Win2k, but Win98SE probably has better support for most consumer software.