I can tell you ahead of time, forget the 98lite route.......
It mainly only saves harddrive space, not resources and if you plan to run things other than mame on it you may run into trouble. It tends to be very annoying because you add soemthing to your setup and it won't have a dll that was included in 98 and you have to install it. I tried it on a test box for about a month and then formatted the thing.
Also 98se is more stable than 98 simply because it has more fixes, and updates available. Although these updates are designed to work on 98 as well, they are really geared towards 98se. Also usb support is WAY better in 98se. But long story short theres not a whole lot of difference between the two, it's just use se if you have it available to you.
Btw, with a system like that I would really invest in some more ram... helps for zinc sometimes.