Windows 98 best for AH imo. I have frequent blue screen in Win2k running 1.08, memory, device and other errors corrupting memory. I'd also steer away from 2K if you have MS Sidewinder FFB or similiar joystick as these are not supported by this operating system and although there are drivers built into W2K for these sticks, they are very rudimentary and not configurable to any extent.
WinMe and XP are great if you can get them to run, but like most of the MS OS's since Win98, more emphasis seems to have been placed on the OOP concept without regard for the performance or reliability issues which are bound to pop up when your code contains thousands of extra objects which do absolutely nothing but take up system resources.
But then again, I'd be happy to go back to MS-DOS 6.2 and use 100% of my PC resources.
In regards to memory leaks in Win98, as far as I know, each instance of a program calls windows to allocate and deallocate its memory blocks, leaking memory is probably being caused by the programs making these requests and not by Windows itself.