I also recently came into possession of a beige G3, and after investing merely $200 into the system, it runs OS X 10.1.5 without a single hitch. I'll tell you here what I've done, and give you come caveats:
System Specs: Gossamer G3 266 MHz Revision A (swapped for Rev. B ROM), factory built-in Zip-100, factory 24x CD-ROM. When bought, had 128 MB RAM (64-32-32 in the slots), 4 GB HD, and the stock Rage II+ video chip with 2 MB of VRAM.
Now, the first thing I did was throw more memory at OS X. A lot more memory. I managed to get 512 MB RAM (128-128-256), and most applications run with little or no slowdown or stalling. Some of this RAM I just had laying around, and I spent about $90 getting the rest.
Warning: according to
http://www.xlr8yourmac.com, the most RAM that the beige G3s can address per slot is 256 MB. Not only that, but they MUST have 8 chips on the DIMM. If you buy a 256 MB DIMM and it has only 4 chips, the beige G3's motherboard will not be able to address that density of RAM, and will see it as 128 MB. Most PC66, PC100 and PC133 DIMMs will work in the Gossamer, but they MUST have 8 chips on them if you're using 256 MB DIMMs.
Second, you're probably going to want to add a bigger hard drive. Your system is 333 MHz, and therefore either Revision B or C. That means you can add a new hard drive to your system without removing your current drive (this is a good thing, as more storage = happy user). I managed to get a 20 GB HD off eBay for $30 plus shipping. Not only will you have more room to store things, but a new hard drive is MUCH faster than the stock HD that came with the Gossamer, making the computer a little more responsive.
One caveat about the HD, though: with the Gossamer G3s, OS X *MUST* be installed within the first 8 GB of a hard disk. This means that for drives bigger than 8 GB, you must partition the drive. On my 20 GB, I have 4 gigs for OS 9.2.2, 4 for OS X, and the remaining 12 for documents and software backups. (In the event of a OS re-install, you'll still have all your stuff this way)
Depending on what you're going to use this Mac for, you're probably going to want to look into putting money in a video card and CPU upgrade. Unfortunately, you're limited to ATI when it comes to video cards: the ATI RADEON 7000 PCI is the best card usable with OS X, and you MUST update to 10.1.5 in order to use it. I'm assuming that 10.2 will have support for the card as well. The going price for the card on eBay is between $120 and $175. A cheap, incremental way to make your G3 perform a little better visually is to check to see if your built-in VRAM slot is open. If so, try to obtain the SO-DIMM upgrade chip that will increase the amount of video RAM you have: Not only will you be able to display in Millions of Colors at higher resolution, but your Mac also uses this memory to help render and buffer QuickTime documents, improving video playback.
The many CPU-upgrade vendors out there have faster G3 or G4 chips that you can put into a beige G3. Once that's done, you essentially have a modern Mac that doesn't look like it came from a confectioners shop! These upgrades are the most expensive of the bunch, though, and by the time you consider these, perhaps an eMac purchase might be more worth the money.
Anyhow, I hope this little diatribe helps! More information can be found at
http://discussions.info.apple.com
Oh! One last thing: yes, get a USB adapter card. As long as it's not one of those Belkin cards, you're in the clear. I put one in my G3 and added a USB optical mouse... it's wonderful. And say goodbye to your floppy drive. It simply WILL NOT work on a beige G3 under OS X. If you need to use a floppy, reboot into OS 9. Otherwise, have people e-mail you the file or send it over whatever instant messaging client you frequent. Floppies are dead anyway.