I would start with examining other applications that might be interfering. Instead of assuming it's IE, take a hard long look at local network apps (firewall, AD blockers, etc).
Disable everthing from task manager except Explorer and try again. Still doesn't work? Then do all PC's on the network have the same problem, or is it just the Win98 ones? Try to establish a pattern of behavior common to a particular environment.
If it's affecting all PC's, I doubt the problem is locally on each PC. Instead, something on the network (possibly a port is being blocked or a proxy server is not configured properly).
~cdogg
"The secret to creativity is knowing how to hide your sources."
- A. Einstein