If it runs your games, isn't that all that matters? If you want a "modern operating system", you should probably use something else.

I would be inclined to install at least SP3 because it probably fixes more potential problems than it causes and includes at least a few useful things that would otherwise have to be tracked down separately.

I agree to what Jorpho said. But in case you really can't decide, just setup a dual-boot.
Especially with flash media, this is easy to do - some readers mount like a drive bay and some like a slot.
And even with real hard drives, there are some swapp-able drive bays available (beware of heat problems).
- Including all of the period-correct retro noise that comes with using these tiny fans! ;)

Jorpho wrote:

I would be inclined to install at least SP3 because it probably fixes more potential problems than it causes and includes at least a few useful things that would otherwise have to be tracked down separately.

I've heard this quite a bit and seems to be the consensus of other posts I've read on this forum. That's probably the route I'll go with this build.... components of SP3 but not other more "modernizing" patches such as KernelEx, 98SE2ME, etc...

Maybe I just don't fully understand the reasoning behind them... why not just use XP rather than updating 98 with Me/2k/XP components? 98 is pretty well relegated to us retro builders, no?

This dilemma is far more difficult than it initially seems to be.
"vanilla" installations are pretty much vaporized after deploying one or two software suites or games which replace core system components with their own, many do this without dependecy walking and making backups of dll files and registry. So in a win9x environment you should make full backups a lot more often than on XP.
That said, updating certain core utilities with WinMe versions is generally more useful than harmful. Like a better scandisk, fdisk etc.
Updating USB components with the latest stack and drivers is also beneficial.
"Updated" web-related components are almost useless today, being hopelessly deprecated - you can forget about stable multi-threaded browsing even with Opera and Firefox, not to mention safety.
KernelEx again can make a few NT5 programs run perfectly but can prevent other software launch, even when disabled.
A utility that can properly uninstall and rollback DirectX can be also handy at times.

(Finally, all this talk is meaningless when one has a very modest computer like a 486 or early P1, which can barely cope with Win95 original edition or 98lite)

Actually a positive note on this SP3:

MSVB6 runtimes are installed correctly.
Some progs were missing MSCOMCTL.OCX and other files so I have got the official MSVB v6 update pack but it would not install. No particular reason just the usual "Installation Failed" what we can expect from programs back then.

SP3 installed all these flawlessly. I do not agree with all the components in it but at least it's good for something.

Jolaes76 wrote on 2017-06-19, 07:50:

This dilemma is far more difficult than it initially seems to be.
"vanilla" installations are pretty much vaporized after deploying one or two software suites or games which replace core system components with their own, many do this without dependecy walking and making backups of dll files and registry. So in a win9x environment you should make full backups a lot more often than on XP.

Yeah you got that right phal. That's why I always partimage all these OSes left and right.
Have a base system with all the basic tools installed without the GPU driver (in case I swap the GPU in the future just simpler).
Then another one with the GPU driver.
Then I go way out of shorting games into categories which can run without installation, pretty much all DOS games.
Then those which can be "fixed" for winsucks to think it's installed eg: exporting a reg file and importing it back.
And those which needs to be installed (pbly even these could be reproduced but does not worth my time tinkering with them I just reinstall them).

All the games and programs which run standalone are on other partitions so I can restore the system drive any time.