Agree about the space saving, but would it improve speed? If it can make my 98SE system significantly faster it might be worth it.
I used it on 98SE a few years ago myself. I don't think speed was improved noticeably. It can only improve speed if you remove memory resident parts and especially on Win 98 there isn't a lot memory resident. If you don't use Internet Explorer as your browser you might want to give it a try. For Win 98 you can download all the updates as exe files and therefore don't need to access windowsupdate with your Internet Explorer. But keep in mind that you might trade in a minimal speed improvement with reduced stability and security. I wouldn't do it.
On Win XP people are better off stability- and security-wise if they just turn off unneeded services instead of deleting system files.