Turbopit, my advice is to upgrade to Win2k, as per a vast majority of people who have upgraded are quite pleased with its increased stability, better memory management, and more efficient threading. If hosting a website and dabbing on the 'net is mostly what you have planned for the machine, then a CPU and/or RAM upgrade is unnecessary (especially since you're upgrading to 256 MB, correct?).
Stay far away from 98SE, ME, etc. =P