I am using it on a pentium 100 since I don't have win95b with fat 32 support. Basically, 98 lite allows you remove non-essential Windows components using Add/Remove Software in Control Panel. However, there are some items you may wish to keep such as IE and Direct X. I found this feature marginally worthwhile.
Another idea of 98 lite is to replace Windows 98 components with Windows 95 versions. Naturally, you must have both CD's since 98 lite will actually copy about 100MB worth of cab files from those disks to your hard drive. You are given the option to replace Windows Explorer, Control Panel, and the Start Menu. Hence you will have the "look" of Windows 95, while actually running Windows 98. Be warned however, you may come across strange error messages when using a replaced componenet of Windows 98.
Bottom line is this: If your system is fast enough, don't bother with 98 lite. Instead stick with IE 4 and do not upgrade to Windows Media 7 or ME. Also, reduce your wallpaper and remove extra fonts. Otherwise, try the product on a test machine first to see if you can live with the quirks. Also, make sure you can uninstall the program to restore the machine to your original configuration. Personally, I have had difficulty trying to add or remove various Windows components after I installed 98 lite.