Talking about drivers there is one suite that has become the most important interface in the game and multimedia sector: Microsoft DirectX. It provides a collection of APIs for Windows operating systems and consists of the following modules: DirectDraw, Direct3D, DirectInput, DirectSound, DirectPlay, DirectShow, and DirectMusic. DirectX allows developers to adapt their software to these interfaces rather than supporting dozends of different graphics chips, sound chips, joysticks or other proprietary standards. This way has proven to be very successful, as you can run any DirectX program with any type of hardware that supports DirectX.
In this respect, it makes sense to use the latest drivers for both your hardware and DirectX. Though there is hardly any performance difference between DirectX 6 (included in Windows 98), DirectX 7 (included in Windows 2000) and the latest DirectX 8, Microsoft regularly implements new features. More and more games also require DirectX 8.
Windows 2000 Service Packs
Microsoft releases a huge set of file updates for Windows NT and Windows 2000 every once a while. Windows NT 4.0 has had six service packs. For Windows 2000, the second service pack was released three months ago. Those Service Packs include bugs fixes as well as performance and feature improvement. Of course an OS like Windows 2000 is much more complex and updates a larger number of files (SP2 is 102 MB, including 1259 files).
Though SP2 is "not considered a reqired update", I recommend to get it, since it does not only eliminate bugs, but also fixes known security issues. A very important feature for all non-US citizens who like to do online banking or brokerage is the introduction of 128 Bit encryption. All kinds of content sharing via the Internet will definitely be safer than with the standatd 56 Bit encryption.