he,
good job!
It isn't a software problem like updating or sharing info. It's a problem with your mbr /boot sector and installing grub /ntldr. So if eveything works fine now, dont mess up again....

somewhere in w98 there is an option to disable the boot up screen. try "run -> msconfig" and search for it.

this link is helpfull boot up screen (http://www.techadvice.com/w98/S/StartingW98.htm) ...

edit the boot.ini file
set default on w98
if that works; set timeout = 0

no screen anymore!

mifa

The way to figure out if you have a hardware problem is with a empty system.
remove everything, reboot, add one thing at a time, reboot again, etc untill it stops booting.

another way to reset...

Maybe a virus?
could be even with SP2

mifa

You can try to remove the (or a) bad hard disk. Hopefully will one work.
Install W98 or Win xp, so you already have something to work with. Then install only the other disk and try again to...

heey
A bit late, but download stinger, (http://download.nai.com/products/mcafee-avert/stinger.exe)
Ad-aware, cws shredder, spybot search & destroy, and even a free anti- virusprogram like Grisoft...