IMHO it doesn't really seem to care. Waste of money. It's like it just can't make use of it because it's a mass market OS without the guts to do real work.
Most people (at this time) can't max out 128 megs of ram anyway. (I do on a daily basis, between my machines there are gigs of ram, but I run WinNT, 2Kpro and advanced server) I have Win 98 machines, but they are for play. Not trying to be abrupt or anything, you just get what you pay for with MS software. Rather than spend more for > 128M ram spend on a faster drive or a bigger monitor, it will make you happier.