98SE is perfectly usable so long as you don't mind the occasional bomb-out or lockup. Irritating, but not a deal-breaker for casual home use. My installs were all reasonably stable, but I did cosset 'em. Can't say as I ever lost any files, just work in progress. If you've never experienced anything better it's doesn't seem such a bad OS.
Some of today's worms/viruses don't work on 98SE any more so you have a sort of quasi-security by obscurity.
Just remember the UNOFFICIAL Windows98 Second Edition Service Pack 2.1a (Freeware) available from
http://exuberant.ms11.net/98sesp.html - all the official updates plus lots of useful tweaks and goodies.