Windows ME is meant to be a 'one last improvement' for Windows 98 and 98 SE. ME didn't sell well, or even perform well on most computers at the time, and frequent lockups and crashes meant that the 9x kernel was getting very bad rep. Thus is the key to ME's great and very un-glorious failure.
Meanwhile, Windows 2000, released on the same year, was rising to critical acclaim similar to what would happen to Windows XP. Due to a rock-solid stability, it being based on NT instead of the 9x kernel, and being released by the time most computers can run NT now. According to some other sources, Windows 2000 was also a success due to rampant CD-ROM piracy.
For some reason, Windows ME runs very fine on this computer and VM. I used a 32-bit color mode with Virtualbox SVGA.