System 7

From Applepedia

System 7: The last major update to the classic MacOS. It integrated the MultiFinder into the base OS, making it mandatory to be able to run many applications at once, cementing the OS to use cooperative multitasking for the rest of its life. Added Virtual Memory, built-in File Sharing, aliases, drag and drop. The Trash and Desktop now worked like normal folders. Made window borders use color. PICT format startup screens! Hooray!
System 7.1: Fonts folder added, instead of using the Font/DA mover. "System Enablers" were introduced, so that Apple didn't have to create new versions of the System for each new Mac model.
System 7.1.1: Bundled AppleScript and QuickTime with the OS.
System 7.1.2: PowerPC support
System 7.5: Added many many features, Apple Guide, the Control Strip for non-powerbooks, the new Jigsaw puzzle, higher resolution desktop patterns, integrated SuperClock and WindowShade, and much much more.
System 7.5.1: The first version of the System to identify itself as "MacOS" with its new startup screen.
System 7.5.2: PCI support. This version of the System in infamous, since it was created in the Dark Ages of Apple, and it was very unstable. It shipped with the first PCI PowerMacs, and the infamous PowerPC Performa series, which was already plagued with problems of it's own. On PowerMac hardware, System 7.5 lumped most error types under the number 11, which meant you never knew what was wrong.
System 7.5.3: Transparent icon dragging. Bugfixes. Made 7.5.2 much more stable.
System 7.5.5: Bug fixes. Made 7.5 almost tolerable. The last version of the MacOS to run on virtually all Macs.
MacOS 7.6: Officially the first version of the MacOS to be called "The MacOS". The name change was due to the fact that it also shipped on clones. A hint of things to come could be seen in the Extensions Manager introduced in this version - it had the Platinum look on its list view.

System 7.5 lore

System 7.5 was released during the Dark Ages for Apple. The most vivid memory most people from this system release was getting Type 11 bombs, requiring a reboot.