Well, you offer a nice catch22. After all, normal POP behaviour is to MOVE a msg to the local store after fetching - which would mean all Win98 stations would only have part of the messages? Probably solvable by redirecting the message store to the file server.
Getting POP/SMTP on workstations to reach the outside connection has two routes:
a) Gateway/proxy, similar to what Wingate does for HTTP. WinProxy is a sample application for this (also does HTTP).
b) Network Address Translation, which would also mean you'd have to throw WinGate out. In NAT (implemented in Win98 and W2K Internet Connection Sharing), each workstation thinks it talks directly with the outside Internet. Can be complex to setup, at least ICS has this name.
Linux's NAT is as complex as that of MS; I don't know about gateway/proxy apps for Linux, certainly they will exist.
Have fun,
/ The Netherlands