winME runs better than 98 for me too, it is due to my laptop using a lot of hardware that only came out after win98 was "developed". The hardware is awkward and software dependent, and winME has a better time of searching multiple directories for a suitable driver than win98 does.
WinME does not appear to be based on DOS however i have heard about people who have patched certain files to show that it is indeed. I tried to use the same patches on my winME but cannot get the same results. I don't actually care. What it is does not affect its unchallenged ability to be shit.
I only use windows for a few programs, unfortunately they are programs i use often, and they leave me sitting in front of windows for far too long. the OS interface itself is incredibly clunky compared with linux, and many freezes and crashes occur. Of course windows detects my cdrw okay, linux doesn't, windows detects my modem, and linux doesn't, i cannot run rebirth or sound forge in linux, or maybe i can using wineX (sound forge needs direct x support, oh there's another thing, i'd need to reinstall all my directx plugins and so on...), we shall see...
still, i am not saying windows is any better. what's the point in being able to run a program, only to have it eat up CDs time after time, or crash in the middle of a saving operation?