Win98se is an excellent choice. Most modern apps will run under it, and it's reasonably stable. Limited USB support is/was its main weakness (tough to use those flash sticks), but thanks to "Maxim Decimus" we now have a nearly-universal driver. For download links, see http://www.technical-assistance.co.uk/kb/win98se-usb-mass-storage-drivers.php

I've yet to encounter a usb flash drive that does not work with this driver.