I tried this once on a totally win98 network once. (Many hours of fun and frustration...)
Set registry settings up the yazoo and got myself into quite a tizzy. It worked! Imagine that!
Unfortunately, I don't remember how I did it. Boo Hoo. I went to NT at that point.
Try and fart around on a lone w98 box. Read the policy and group editor notes on MS's site and on your Win 98 CD - and might I add blow up the machine.
I also was able to set a password that only allowed me access to the critical configuration that allowed software installations.
Then it blew up.
So to make a long story longer... Good luck!
I did try some things like deepfreeze, but I don't remember if they allowed incremental changes to system files. Probably not... Worth a try...