Here's my rundown:
Slow computer : (i.e. 166 - 400) DOS or Linux
You want an OS that will run fast with minimal overhead and can run as many games as possible. The great thing about DOS here too is you have the emulators like vantage that run few games, but run them VERY well on slow dos machines.
Medium computer : (500 - 1ghz) DOS or Linux or WIN98SE
Tradeoff here. You want to run the classics, and you easily can, on any operating system. If you don't know DOS or Linux and aren't good at really troubleshooting, you can run 98SE and have the ease of use that you need. If you know DOS or linux, go with them to run the MOST games at full speed, or 98 if you don't care about the ultra high end games and don't want to bother.
Fast computer : (1ghz - 2ghz) Linux or 98SE or XP
Tradeoff again. Linux runs games fast, but unless you know it, forget it. Linux has a large learning curve. It pays off in the end, but it's a pain in the butt. 98SE here will run relatively fast, but ... it's 98.. so .. it's still susceptible to all the same crashes and crap that came with the 9x kernel. Yeah it's better than 95 or ME.. but hey, I hate it personally. -- Now, XP is a great OS. and on these machines, it runs VERY WELL. Will it run slower than 98? Sure. But it WILL RUN STABLE. and it boots very quickly. XP is the choice. XP is finally something done RIGHT by Microsoft (Besides the whole friggin blue interface Theme, which I hate. so I switched it to windows classic theme and it's better. *end off-track rant*
Really Fast Computer (ESPECIALLY if it's a hyperthreaded processor 2ghz+): WINXP!!!
OK. You're not going to be able to run California Speed or Crusin USA ANYWAYS. Even with the ultra fastest P4 hyperthreaded 800 mhz bus w/ 2GIGS of DDR400 ram. forget it.. NO WAY.. You can run EVERYTHING else at full speed in ANY os. GET WINDOWS XP. Update it with windows update. Get it set up to automatically log in with one user. It will be stable. It will rarely, if ever, crash. You won't have to spend 2 months figuring out how to use it. There's a ton of available emulators and frontends for it. YOU KNOW windows. Go to
http://www.asoftwaresolutions.com/product.asp?productid=481&categoryid=54 and order XP Pro for $120. They're OEM Versions, I dunno if they're supposed to be selling them, but I got them, wrapped, with the labels to put on the outside of the computer, AND I called microsoft, AND they ARE legit versions of XP.. not pirated. the holographic CD's and Book and everything. RUN XP.
Disclaimer: This is my OPINION. I'm not calling anyone else stupid or a loser or whatever for picking their methods. Don't flame.
End disclaimer.

--NipsMG