Just like the_Jinx said. If you keep your patches up to date you are in the fairly safe zone. Also you need good AV protection and get a good personal firewall. And make sure to turn of file and printer sharing unless you absolutely need it.

The crux of the situation is. Win 98 is over 5 years old (older if you figure it's built on 95 OSR2) and 98SE is about 4 1/2 years old. Anyway, just think. Every expert from white hats, black hats, KiDDiEs, hackers, crackers, good and bad. Have been ripping this OS apart for a long time now. So they have had plenty of time to find holes. In MS's attempt to make the OS user freindly (ie.. click and point) they have made a few bungles along the way. Just like in the first W98 (not SE), the MS Personal Web Server installed by default. Well if someone did'nt knoww about it. Guess what. Port 80 was open to the world. Just one small example. It's just a matter of getting to know your OS you have. Learn it inside and out and matain rigorous security. And don't forget, update your OS, AV, and any other software you have on a regular schedule.
Hope this helps some.