In my opinion, Windows Millenium Edition was released to capitalize on the word Millenium, as the year 2000 was approaching. Sure, Win2k was going to be out too, but it was directed mainly at the server market, and it didn't feature the word Millenium in the product name. So, they needed a good way to make some more money in the consumer market. Windows Millenium Edition was shoved to market with enough new things to make it slightly different, mainly in that programs crashed more.
Take Win3.1 before WinME.