My 2c (these probably fall into the KernelEx domain) :
1. Fix the XP SP2 (+) emulation, so it is as stable as the 2000 SP4 emulation. Many applications and their installers (Opera 11, Acrobat Reader 7.09, etc.) work pretty well using the latter, but crash with the former. Missing/buggy functions?
2. Solve the "new style" Java plug-in problem, so we can get Java on Opera 11, FF 3.6+, etc.
3. Get other FF plug-ins, such as the 20-20/Ikea "kitchen planner" to work (with NT5, this even works with FF 220.127.116.11pre).
4. Solve remaining issues with Opera, such as crashing when a new instance is attempted, or when it is the default browser and you double-click on a HTM file.
5. Solve remaining issues with Acrobat Reader 7.09, such as crashing when you right-click within a File-Open or File-Save dialogue, or the blank text in the search results when you use the "binoculars".
6. Get Adobe Air version 1.5 or higher (and Adobe Air applications) to work.
7. Fix the history & bookmark problem with FF 5/6/7/8.
5a. Stop Acrobat Reader 7.09 crashing when you select "Document Properties" in the "File" menu.
8. Office 2007 File Format Converters (Microsoft Office Compatibility Pack for Word, Excel, and PowerPoint File Formats).
For Opera, to solve all those problems, set the opera.exe, opera.dll, netscape.exe, and flash plugin files to 2000 SP4 mode. On the others, you will have to set the EXE's and DLL's of the app to the 2000 SP4 or XP mode. This is working for me. It helps to have the latest M$ runtime, installer and scripting updates. As per java, once on the drive, some of those have to be set to the best mode possible.
Each PC is different. The latest BIOS updates are absolutely necessary as are the most recent drivers. The biggest problem is with the chipset drivers. A standard Gateway GP6-400 with a PII 400 MHz CPU and WD HD with no modifications to the motherboard at all will love KEX and have no problems at all, where-as a Micron with PIII 600 MHz CPU and reworked board shall encounter some problems with KEX owing to exotic drivers which hook incorrectly until the registry is modified.
For the registry reason I advocate running unregistered apps because the registry is a dour security issue itself. With 9x, it's time to incorporate the old DOS philosophy that a registry ought be more a stack registry that an "on-the-drive ROM risk."