I don't know if win2k is a lot faster.. there are times its faster, there are times that it is slower, but the main key si that it is a capable gaming OS.
As far as application compatibility, I haven't had any problems. I know DOS programs do have problems(because of a lack of true DOS in 2k). Hardware compatibility is starting to get where it should be.
For example, this the hardware I have or have had and that works in win2k.
3com HomeConnect DigiCAM
Sony DSC-S50
Gravis Xterminator USB(and gameport)
Deskjet 880c, Laserjet 1100, Deskjet 712C
Intellimouse Explorer
SB Live(has always worked, but LW3 and drivers are finally out)
SMC/Netgear/Linksys/3com Nics(various speeds)
Geforce2 GTS(CL), TNT2 Ultra's(Diamond, CL, Herc), V3-3500TV.
Adaptec 2930s, 2906 Scsi cards
USB Zip drives
Both BX and VIA133A mbs
Rio 300s and 500s
That's all I can think of off the bat. Sometimes a workaround is needed, but
http://www.ntcompatible.com is the best win2k/compatibility site bar none.
Mike