Sometimes HD's are buggy and they loose or have fuzzy system files. Wear and tear at the center of the platter where the system files are stored.

Boot to the Windows using your startup disk and then put in the command at DOS prompt:

sys c:

This will transfer fresh copies of the system (hidden) files from the Win 98 boot disk to your HD.

WARNING HERE: Your bootdisk MUST be win98 and should have been created from your system when you first installed it. You can use a friends startup disk as long as its of the same 'flavor' -- OEM vs. Microsoft Upgrade.

Check this by right clicking on MY COMPUTER choose PROPERTIES and look at the version serial number. If OEM is in the mix you have that otherwise it's MS upgrade. Some OEM Win98 boot disk may cause havoc with MS upgrades versions, but you can also use the setup routine from the Win98 CD.

Can you boot from the CD? Go to BIOS setup and choose primary boot device as CD-ROM and drop in your Win98 CD. Then use command:

setup /ip:r

to reinstall Win98 with your current setup -- ip:r modifiier sez to process your current registry when reinstalling Win98.