I suggest you try the install again. The error you are getting is a standard error for any dll missing from system32 directory. Here is what I would do to correct your error:
Get ahold of or make a boot disk (windows 98SE). I use http://bootdisk.com/bootdisk.htm You'll want the win98SE OEM. It doesn't matter what operating system you are installing...the win98 boot disk will get us to the menu we want to get to. I use mine for just about every windows OS out there.
Boot up off your boot disk. type the following: "fdisk /mbr" This will blank out your master boot record and get rid of any OS data that may be stored there.
I would then format the entire drive...blank that puppy out.
After this, I'd install windows normally and see what errors that gave me. You should be ok after that.
If your install still results with the same or similar error...I'd say you may have a corrupt copy/cd of Windows.
Let me know what happens...I'm interested in seeing this one through.