Your first MPC? Wow! What a fresh way to start out. This is my 2nd MPC that i've owned and 4th MPC that i've used. I used to own the first
MPC 2000 and i thought it was world. I used the MPC 2000XL a lot - going back and forth from my friends' houses. It wouldn't read the MPC 2000 sounds and i thought that sucked. I used the MPC 60II in the beginning and that was so much better than using the Akai s950 Rack Sampler. Here i am today, owning and using the best MPC ever made. I'm so glad i chose to step it up.
I'm running OSX on a G4 Dual 500mhz Gigabit Ethernet Desktop with 1.5gb of RAM, in which i've enhanced with a
Gigadesigns Dual 1.4GHz Processor Upgrade. I can't afford the 2.5GHz G5 right now, but it'll be my next computer purchase, one day. Until then, i am certain that this upgrade will hold me well. It works perfectly! Most of the applications i use require dual processing and that's why i went with the computer i have. I've also got a Maxtor 120gb IDE Drive for my master hard drive and a Maxtor 250gb IDE Drive for my Pro Tools files. I've installed the
Sonnet Tempo Trio card in my computer so that it can utilize the full 250gb of that drive. I've partitioned it with OS 9 running on 12gb, i use it for my Photoshop/Illustrator plug-ins that haven't upgraded to OSX. Classic Mode in Panther works perfectly - it's just like having OS 9.2.2 on your computer, for whenever you need it.
I used to experience the slowness in Puma, Jaguar & Panther that you mentioned, before i upgraded my processor. I also used to experience daily crashes and i've learned that it was because, i hadn't done a clean installation of OSX. Also, since OSX is a RAM hungry operating system, i decided to max out my on-board memory. All of the above has contibuted to a healthy OSX environment for me.
I don't have any info on your computer specifically and its dealings with OSX but, you have a Quicksilver model and you shouldn't be having any problems - even with a single processor.
Tiger will be the most updated version of OSX and i can only believe that it will work better than Panther - which to me, is a great system.
I also have a Blue & White G3 Desktop that i've only been running Panther on - it's been working fine. As long as i don't open too many applications at once, i'm alright.

Is your RAM maxed out? My G3 is 400mhz but, the on-board memory's at its peak. This could be why Panther's working on such an old computer - i don't think your single processor is as big of a problem.
I can't comment on the wrapped VST plug-ins topic because, i haven't crossed it. All of the plug-ins i use for music are OSX based and none of them are wrapped. If you have any questions about OSX and your model of computer specifically, you could always check out the
Apple Discussions Forum. Any questions i've ever had, have been answered times ten on there. Hope this helps your decisions.
I come from the Cold School...