Before that, the Office 95 applications had a curiously black-to-dark-blue custom drawn title bar.
Then Windows 2000 introduced the subtle mouse pointer shadow, and translucent fade-on-click effect on menu items.
Agree with you about Tahoma being pixel perfect, at 8 point I think. Then came the marvels of ClearType!
As far as translucency - Win2K introduced the new APIs that any app could use to make a window translucent. That was used for those fade-on-click effects, and also for tooltips. But after people figured out that you could do it on any top-level window, there was a brief craze where random apps added it as an option, sometimes for no reason at all other than showing off (like, why would a CD burning app need a translucent window?).
Ironically, you used to be able to run KDE1 in 8 bits per pixel color mode (256-color palette - quite important for performance back then) and that did support titlebar gradients, unlike Win98 in the same hardware mode. That gradient was far from "smooth" of course, but like its Windows equivalent, it was still very helpful in making it easier to spot the titlebar at a glance.