This is a list describing different Windows versions in terms of game compatibility.
Windows NT4: Windows NT4 uses a preemptive multitasking kernel and supports two CPUs and up to 4 GB RAM in the Workstation Professional version. The system is rather lightweight and requires only a 486DX2-66 and about 32 MB RAM, a Pentium system is recommended. After boot the whole Windows system uses just about 16 MB RAM. Windows NT4 has a higher stability as Windows 95. It was released with DirectX2 and got support for DirectX3 with the latest servicepack 6a. The user interface is the same as in Windows 95 with some additional features from Microsoft Plus! for Windows 95. However it is possible to upgrade to the user interface known from Windows 98 by installing Internet Explorer 4 with Active Desktop. Windows NT4 does not support Plug and Play and USB. This is usually no problem since drivers for PnP hardware bring their own configuration sheet and for mass storage USB devices third party software is available.
For gaming Direct3D from DirectX3 is supported. However most DirectX games with accelerated 3D graphics require at least DirectX5. Still, DirectX3 allows most 2D games that use DirectDraw to run (e.g. Starcraft, Diablo e.g.). Benchmarks show that due to the different driver architecture accelerated 2D graphics is a lot faster compared to Windows 95. The OpenGL support from graphics card drivers for Windows NT4 is solid. Also the most important gaming 3D accelerator cards from 3dfx at this time have Glide support in Windows NT4. Thus most Glide compatible games work (e.g. Unreal engines, Quake engines).
Any 16 bit related code like DOS programs are run in a Virtual DOS machine (NTVDM). It supports 486 code. Direct hardware calls are not possible.
Windows 98: Best all-in-one operating system for DOS and Win9x gaming. 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 2000: A continuation of NT4 and the final OS from the NT line without a version targeted at home users/consumers. In similar fashion to the relation between 95 and NT4, 2000 is more stable than 98, although several graphics cards manufacturers initially had problems providing drivers with the same performance as under 98. Win2000 Professional supports up to 2 processors, Windows2000 Server up to 4, with no differentiation between physical processors and individual cores on a multi-core CPU.
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 programs are run in the NT Virtual DOS Machine (NTVDM). Basic Sound Blaster 2.0 and MPU-401 support can be enabled by adding SET BLASTER=A220 I5 D1 P330 T3 to the autoexec.nt file. The virtual resources do not have to represent real hardware resources. The NTVDM emulation uses the default windows multimedia devices. Direct hardware access from within NTVDM is not possible.
Windows XP introduced the recognition of Intel's Hyper-threading simultaneous multithreading technique. Furthermore, it differentiates between actual physical processors with their own socket and multiple cores on one CPU. WinXP Home Edition supports one physical processor, WinXP Professional two; both support up to 32 cores without Hyper-threading, 16 with it. The somewhat exotic Windows XP x64, which is essentially a relabeled Server 2003 x64, supports up to 64 and 32 cores, respectively.