Just a few points.
Win98 for old, slow machines, or those with limited memory, or for users who can't afford to upgrade.
Perhaps, but none of those are the reasons I still use 98.
I still use real DOS occasionally. I sometimes use it to delete files that 98 and "Restart in MSDOS Mode" won't let me. I also used it extensively to write a food dictionary because Word's sort is wrong, while the DOS Sort is good, just a bit limited (I'd love a really good, fancy bells and whistles Sort - anyone know). I believe 98 is the last to give real DOS, and anything that removes control from me is a distinct no-no.
I fiddle a lot, and I have often needed to use SYS.COM, and a couple of other commands. I know some are not supported in ME. I assume they're not supported in subsequent OSs either. Again, more loss of control - why did they remove useful stuff?
I think 98 is the least controlling, that it was written to some degree with the hobbyist in mind, more in keeping with the spirit of the time - it is just a WIN95 upgrade. (I've still got my WIN95 CD. I also had DOS 3.3 (better SORT) on floppies for a while until they all refused to read. Floppies are crap, aren't they.)
I think XP is far too wordy - compare the Start/Find screens. It's definitely too hand-holdy.
Win2000 seems to refuse to do anything - it's got a no-can-do personality. Doesn't like these drivers, doesn't support that thing. When I was using public terminals, I refused to use 2000, I could get nothing done.
I know 98 fairly well, and I can tweak it, and modify it to suit me.
Lazyness, too. When I'm reinstalling, I have it, I don't have the others. And once installed, I don't think much about upgrading (?). I justs gets on and does the things I gots to do. When I'm using a wordprocessor or a photo manipulation program, or a drawing program it don't really matter what the OS behind it is.
It seems to me from reading the net stuff that installing XP is not as straighforward as 98, so that, too, puts me off. (When I use other PCs running XP I get alarmed at the amount of crap that's on them. Is that because it IS difficult to do a clean install? I don't know.)
The net is littered with dire warnings about the flakiness of ME.
Like everyone, I suppose I'll have to upgrade eventually, unless linux (Tin Hat, as far I'm concerned) gets its arse into gear, or I die before that becomes necessary.
Why do all pop-up boxes always sit right in front of the work area, or appear as far away from the mouse-pointer as possible? There are few mods I'd like to see made to 98, though. Which is why I hope it eventually becomes public domain - one can have harmless little fantasies, OK.