However, in the early days of NT, compatibility was a nightmare: NT could run some DOS and Windows applications (albeit slowly), but it could work with only a small subset of the hardware that was available to DOS/Windows users.
The Windows 2000 Professional operating system is designed primarily for business users, while Windows 98 remains the best choice for home users and gamers.
Also, regarding your question about the native Win95 apps: Newer versions of Windows (I'm not sure about Windows8 though) are backwards compatible with applications written for an older version of Windows, with a few exceptions: I haven't been able to find a way to get Win Vista to run 16-bit DOS apps, and if a program is incompatible with Windows NT it won't run on NT and above I see, would there be any middle ground here?
As in, would there be any 32 bit high end servers/gaming machines floating around from the 90's that could run Windows 95 and also just about manage Windows 7? the Cray T3E (a high-end supercomputer from the late 90s) would not be able to run Windows 7.
Windows 9x/Me is based on DOS, a 16-bit command line OS that debuted in 1983.
XP, however, is based on the stable and reliable 32-bit NT platform, which first debuted in 1993.