Windows ME (Millenium Edition) is just another continuation of the Windows 9x line. Overall, it is NOT better than Windows 2000, which is based on Windows NT. However, in terms of home users, Windows ME would probably be better in that it is easier to use and supports games more easily.
I currently have both ME and 2000 but I'd go with Windows 2000 personally if I had to choose... it is stable as a rock (I haven't had it crash once... ME still crashes, though not as often as 98) and does support most recent games anyway.