Windows 98se and ME do not have a limitation. The limitation is actually because of what's called the K-mixer in Windows 2000 and XP only. The K-mixer handles all WDM (Windows Driver Model - new for 2000/XP) and MME (MultiMedia Extensions - Windows 98 style Windows sounds) and internally processes and mixes them in Windows. Windows 2000 is limited to 24 audio tracks in its K-mixer and therefore will do no more than 24 audio tracks of WDM or MME. Windows XP has upped this number to 36 tracks.

Please note WDM or MME are the only methods affected by K-mixer. ASIO and GSIF (Gigasampler) and other proprietary audio methods are unaffected and do not have this limitation.