This is a list describing different Windows versions in terms of game compatibility.
Windows 98: Best all-in-one operating system for DOS and Win9x gaming with the possibility of rebooting into real DOS. Basically a much more refined continuation of Windows 95. Good DOS compatibility either by DOS window or rebooting into DOS. Emulates USB mouses and gamepads in DOS window as well. Has numerous features that Win95 got only with the OSR releases and which weren't present in its original release, such as support for P6 (Pentium Pro and up), FAT32, selection of IRQs, AGP, UDMA, USB and MMX.
Furthermore, SSE and multiple monitor support is exclusive for Windows 98 and up. Windows 98 supports up to 512 MB RAM without tweaking, with tweaking up to 1 GB. 3rd party USB mass storage drivers, namely nusb33e, are only available for Windows 98 SE due to its newer USB stack, so this revision is by far preferable. 3rd party drivers are also available for ADSL connectivity (raspppoe).
Windows XP: Last OS from Microsoft so far to support game ports, MPU-401 ports, the IPX protocol, out of the box MIDI device selection and EAX 3D sound hardware acceleration through the DirectSound HAL. Generally good Win9x game compatibility. DOS only via NTVDM emulation, has basic Sound Blaster support (SFX part only).