I actually leave about half of the eye candy on - because while it may speed up the system, part of the allure of XP
is the eye candy.
I really haven't noticed the 98 rot syndrome - but at the same time, I haven't had issues with 98 rot for a while. I really think it's purely an IE issue - having uninstalled it (using just the free version of 98lite), it's been running solidly for over a year now. And, to confuse matters even more, I gave my sister a Thinkpad 365XD w/ Windows98 installed on it, with IE, and having received it two and a half years later, with no formats or adjustments, it still runs very well. Go figure.
Anyway, one of the noticeable tweaks is as mentioned prior, setting the pagefile to one size. That one in and of itself is an enormous boost. I haven't moved the pagefile to a separate drive (I've read it's a significant stability add-on, since it doesn't get fragmented with the rest of the drive).
Turning of hibernate/system restore/auto update also speeds up the system considerably. Not using IE and using Firebird or Netscape is also quite a help.
There's some others that can be found here:
http://www.pcaviator.com/articles/5_XP_tweaks.htm
I used them on a manufacturer's XP load and it helped quite a bit. After doing a fresh reformat, I just did those mentioned above, and I've been thoroughly enjoying the performance since.
All this is not to say win2k isn't as good - I did use Win2k on a machine for a year and half without reformating, and it got beat up significantly. The backwards compatability with 98 stuff is what makes XP stand out (in my mind). And 2K has the plus of being much future along in terms of security.