I lurve my Classic II ;D (as Uni can atest to)

I honestly wouldn't trade it for any other model.

As far as OS, I find 7.1.2 runs very well on it. I have never noticed any delay in anything I have done, felt the RAM was too cramped, etc... I can get 7.1.2 loaded with all the extensions I need for ~1400k of memory. Plenty left over to do just about anything I would use it for.