I wouldn't say Win2k needs "cutting edge" hardware. Anything over a PII 350 is fine. I've got production Exchange servers running on early PIII's, and a couple of file/pring servers running on PII 350's no problem. What Win2K needs more than anything else is RAM. But an older machine, say a PIII 500 with 256 MB of RAM and I'd go with Win2K every time. It's just a better OS, head and shoulders above 9x/ME. On the same hardware, 2K will be far more stable and secure than you can possibly make 9x/ME, the same tools just aren't there in the 9x code stream. If you spend a bit of time tweaking a 2K install, you can get it just as fast as WinME, if not faster. It used to be that drivers were optimized for 9x/ME, but these days the fast latest drivers, even for older hardware, are optimized for 2K/XP instead. Also with 2K or XP, you have a decent file system with NTFS and a decent level of security, neither of which you can get with 98 or ME. If security is one of the things you want in your OS, you need to use 2K or XP.
Though I do agree, there are times when a simpler install of 9x/ME is cheaper and faster. But if you have hardware you bought within the last 2 years and are thinking of putting on OS on it yourself, I'd recommend 2K or XP for anybody that is a gamer, a tinkerer, a geek, or just wants security and stability beyond what's possible on older OSs.