Windows 98 should not be the problem. I still have some doubt about the Database being acurate or db.ini looking in the wrong place for the database or with the wrong password. I set up and taken down my server so many times now It never surprises me when I leave some small detail out like a space at the end of a line in a .ini file or something. All I can say is to go over with a fine tooth comb and then filter what you find with a clean sock and then boil the rest till purified
There are so many things that can go wrong, if you have time post all the files here for us to look over. Hope we can help you through this, I know I have recieved lots of help here.