As I thought, another Aussie who can't take a beating without whingeing.
But, to the matter at hand, I assume you mean Win 98 Original and not Second Edition.
So my guess is that this is RAM or Swapfile related.
Try going back down to 64MB RAM for starters. You can have too much RAM in some configurations and the processor spends a lot of time and energy just servicing the memory and not getting on with the job.
Make sure you are not restricting the SwapFile size; it should be 2½-3 times the amount of RAM. That's WIN386.SWP in the Root directory if you are managing it yourself.. It may be corrupt; you can delete it and when you reboot it will be recreated. It's best to let Windows manage it. (That's My Computer(right click)>Properties>Performance>Virtual Memory).
If you use the "Briefcase", make sure you are not overloading it.
Stop as many background applications as you can and see if there is one that is hogging the resources. (You know, the Ctrl/Alt/Del routine).
Hope you will soon feel better.