Here are some configuration/setup tricks that I have used while configuring Windows 9x based virtual machines under QEMU.

KVM Compatibility

Windows 9x will hang if shutdown in a KVM environment. In order to prevent this, disable the shutdown logo by renaming C:\WINDOWS\LOGOW.SYS to another name such as C:\WINDOWS\LOGOW.SYS.BAK or just remove it.

Disk Drive Performance

Windows 9x will run very poorly with the default disk drivers. In order to improve performance, enable DMA mode.