so this has turned into a LS thread? sometimes even a topic like rips ends up in something productive.
the slowdowns you might have noticed with other desktop replacements is because those run on top of the Windows default shell (explorer.exe), so if you are running more programs you can´t expect them to use less resources.
with shell replacements as LS that´s different. you run LS instead of the regular Windows, so LiteStep will not slow down your system, but make it faster. also on Win98 it will make it more stable.
how many resources LS uses depends on the theme you use. many people say that the resource use depends on the number of modules you run. sounds logical, but i have pretty much experience in LS and in my experience the amount of images and the amount of transparency in these images are far more important than the number of modules.