It's not so much the operating system itself that's buggy, MS writes decent code. The chief problem within 98, 98se and ME is the "web integration" theory of having IE constantly integrated into every operation of the OS. IE isn't the most stable platform out there, as you already know, and is the reason behind 90% of the crashes.
I just finished a CompEng. internship here at school with MS, and the campus rep spent most of our group debriefing bashing IE!
Another reason for mass instability is tweaking. As a stand-alone OS, ME does a fine job. Start loading all sorts of new threads (system tweaks, hardware settings, multimedia tweaks, and those registry keys meant to speed up your system you find EVERYWHERE!!!), and you're going to find yourself spending as much time in maintainance as use of the system.
All things taken into consideration, I'm running a Linux/ME machine (need ME for games!). ME has never crashed or BSOD'd on me; I've also never loaded anything more than 1) tweakUI, 2)98lite (to deintegrate IE from the shell), and 3)nvmax.
If you begin encounteringn problems, the best thing I found during the internship was 98lite. Every 98 or ME station we used was 98lite'd to death with no operational problems and up-times of a week at a time.
That's about it.
Time for class.
-Victor