Well, I think I can do one better -- I have a Windows 95 VM running under Fusion on my MBP. The reason? I have a particular Windows app that is critical for my work and have a VM created specifically to 'host' this one program.

Anyway, the real question was: why use such an old version of Windows? Because Win95 is the earliest version that will run standard win32 apps. Why is that important? Two reasons: With such a minimal OS, the VM boots in seconds and is extremely responsive. (i.e. I imagine the original poster may be using Win98 for performance reasons w/VPC) Also, like most OSes, each version of Windows has gotten larger and larger in terms of the HD footprint. By trimming away unused files, I was able to reduce the overall size of my Win95 VM to a little over 100Mb and still have it functional enough to run the app I need. (Even using utilities such as nlite, there's no way get a Win2k/XP VM anywhere near that small)

On a final note (this casual reply has gotten far too long), I suppose Win98 may be a good choice for simple VMs as I think it was the first version of Windows that had solid USB and scrollwheel support.