System 6 will dramatically improve your performance. Apple has three versions on their website; you'll probably want 6.0.8. It's not a bad idea to keep 7.x around for compatibility reasons, but it is far more demanding on the hardware.

An SE will actually go back to 4.x, although Apple doesn't have systems that old on their website. (It's also possible to run older versions on SE, but they're not officially supported).