It all comes down to RAM, really. If you have the standard 64 MB, I'd stick with 8.6 - if you have more, go for 9.0.4. 9 is a bit slower, but the features taking CPU can be turned off, and the newer graphics/USB drivers in 9.0.4 should speed your machine up some in the long run.
My tip, if you have the $, would be to invest in a 128 MB RAM circuit - bringing the total RAM to 192 - and then upgrade. That's what I did!