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The program I'm working on has little potential of ever making it beyond the walls of my house. So the client is my family.
Since we have one old Win98 sitting around that may need to run the program, I need to test against .Net 2.0 in an ancient environment. And since we have some unused ME keys lying around, it was only logical.
If it's a .Net app then you should be able to test it against .Net 2.0 on a modern system.
I kind of like .Net 2.0. It's still relatively svelte and it includes the main language features (generics and anonymous delegates) that you need for most small projects. Linq and lambda functions are awesome if you need to do 'business stuff', though; I wouldn't want to be without 3.5 for work purposes.
I'd say ME was worse than Vista, though on a fresh install Windows ME did work as well as Windows 98 SE. The problem was that if you upgraded an existing system from 98 to ME, it was a disaster. (My older brother used to do support for 98/ME and reported that 99% of the time that someone had problems, they'd find out it was an in place upgrade.)
The only that I've come across statements like that, it's either been a con, trying to get you to install something else (usually the iffy google browser -- and don't forget to run a security scan from every site you visit, because they have your best intentions at heart), or it's been Microsoft branded (e.g. a SharePoint site), which uses controls that only work fully in IE.
I wanna be a eunuchs developer! Pass me a bread knife!