Fascinating question! The answer is that it depends on the time, place, and religion, but in general the answer is 'okay' to 'not great' for Christians as time progressed, and 'great' to 'okay' for Jews. In almost every case, it was better to be a Muslim, and social pressures such as a 'dhimmi tax' (a special tax placed on non-Muslims common to the Muslim world), exclusion from upper government tiers, restrictions on land and slave holding, and even restrictions on clothing, were in place to encourage conversion to Islam.

All that being said, Ottoman philosophy was that ultimately monotheistic religion (polytheism was not permitted) was a personal choice and that the best way to ensure social stability was to encourage autonomous religious communities, or 'millets', with their own courts enforcing their own religious laws on their own people.

All this was subject to political climate. Christians, for instance, went through periods of acceptance and participation in civic life to outright hostility and attacks. The animosity that the Sultan showed Christians was directly proportional to external influences. When Russia and the Empire went to war periodically during the 1700s and 1800s, the Turks would persecute Orthodox Christians. Conversely, Latin Catholic traders were permitted to live in their own communities within Istanbul relatively unmolested except during wars with Venice, in which they were frequently banished or imprisoned. As the Ottoman Empire waned during the close of the 19th and start of the 20th centuries, persecution became more virulent, culminating in the genocide of Armenian Christians.

The Jews had a substantially different experience. Life for Jews under the Byzantines was oppressive and dangerous, and the coming of the Ottomans was seen by many as a blessing. Conditions for Jews in Constantinople improved immediately. To replace fleeing Byzantine-Greek artisans and merchants, Mehmed II forced, cajoled, and incentivized Anatolian and Middle-Eastern Jews to resettle in Istanbul and gave them prominent places in government, commerce, and tax collection. Subsequent Ottoman Sultans encouraged Jewish emigration from Europe to the Empire, promising them safety of person and property in accordance with Islamic law. And while Jews, like Christians, were subject to heavier taxation, they were given many more rights than other subject peoples, being perceived of as more trustworthy because they were stateless. In 1496, Sultan Bajazet welcomed hundreds of thousands of fleeing Spanish Jews to the Ottoman Empire, declaring "How can you call Ferdinand of Aragon a wise king, the same Ferdinand who impoverished his own land and enriched ours?"

The Jewish experience in the Empire would wax and wane along with the Empire's fortune and later Turkey, for many considered themselves Turkish and strongly supported Ataturk. Ataturk himself considered Jews a fundamental part of Turkish identity and was in turn idolized by many Turkish Jews. It would take growing Islamic hostility to the nascent Jewish State of Israel, and suspicion of local Jews as spies, to force many Turkish Jews to emigrate. Yet even today, Turkey is one of the few Muslim nations to have normalized relations with Israel. This is in part due to the long and surprisingly positive relationship between the Turks and the Jews, with its roots in Ottoman pluralism.