Thought I'd dredge up an old topic, given that I now have something relevant to add.
Does Win98 help with playing games? Hmmm...compared to what - Win95?
I just upgraded last night - wiped my '95 partition and slapped on Win98 SE. Got a used OEM version for 50 bucks from www.gametz.com . Worth looking at if you want cheap software. Given that the cheapest legal new OEM I could find was about 80-90 bucks (and that's with an HD or mobo purchase that I don't need right now), I reckon it was a pretty good deal.
Anyway, I haven't got everything installed yet - that'll probably come tonight. However, Q2 and Q3 both still work despite me blowing away the old registry and so on - I did a few tests with those, and they both come out a little over 10fps faster than Win95 OSR2 - both used to run somewhere in the 40's, and now are up averaging in the 50's in their respective timedemos.
A pretty good 25% increase, I'd say - for the 50 bucks I paid, I'm definitely happy. I got more of a tangible performance increase out of Win98 already than I Have with messing about with tweaking.
Other improvements I've noticed are that the boot and shutdown times are definitely improved. We'll see how it goes once I have all my junk installed, but at the moment, it boots up in about 1/2 to 2/3 of the time that Win95 took, and the shutdown is almost instantaneous.
If you can find it for cheap and you're still using Win95, then I'd recommend it. As always, avoid the upgrade version like the plague...go for the full or OEM version, and install from scratch.