Pete,
After replying above, I then experienced exactly what you were seeing. I also have a win98 machine that ran sweetly and then suddenly started locking up for a split-second every 1-15 seconds. I have always done all the right things: ran all the anti-spyware programs, regularly defragged the hard drive and still I wondered what the problem was. Incidentally, the Microsoft anti-spyware-suite doesn't run on win98.
I've sorted my machine by the following:
Diagnosis:
1) Start: Run - type msconfig and select the startup tab - that will show you exactly what's running on startup and potentially stealing your resources (ctrl-alt-del will not tell you much about what's running in win98).
2) There's a free process viewer that does much what the task manager tells you in win 2k. It can be found at
www.prcview.com and it's a small and elegant piece of software.
What was hanging my machine:
a) Multiple instances of 'realplayer'
&
b) Microsoft's kb891711.exe (installed on an auto-update and had caused stuttering performance before)
msconfig will allow to uncheck the boxes of the various processes that you don't want to run at startup. Running prcview will then confirm that they are not running when you reboot.
You may also find that your system clock runs slowly when the machine is left on whilst you still have the stuttering problem; this has nothing to do with the clock battery being flat and is simply due to the fact that the processor load is increasing to 100% every 20 seconds or so with either a) and/or b) above.
If this doesn't solve it or doesn't make sense then PM me.