Comment by userbinator

The former runs on virtualized Windows Me

...which is, like the rest of the DOS-based Windows from Windows/386 onwards, itself a sort of hypervisor architecture --- DOS applications effectively run in VMs thanks to V86 mode, giving native performance. The difference is very noticeable if you open something like MS-DOS EDIT on Win9x vs. NT 4/2K/XP --- the latter runs in an emulated environment and the latency is enormous.