Desktop

First, enter bios and load bios/setup default.
Check that you are in PnP Yes mode.

Boot, safe mode, remove any mouse and modem from your peripheral list.
Reboot, let windows discover anything, and give drivers if necessary.

If not enough, you should think to use 3rd party hardware checker (ie Sisoft Sandra) to verify your hardware.

And, in last, save datas break partition, and re-install W98.

maybe it wasn't actually hung, maybe it was getting ready to error out with 'no mouse attached'? due to failing mouse/ps2 port or poor connection? and you've fixed that now? so only have the modem problem? you sure you have phone jack connected to proper port on modem? the one that says 'line' not the one that says 'phone'?
my questions:
1) can windows see a (known good)serial mouse when started in Safe Mode? (forget this if you have no mouse problems anymore)
2)do the modem diagnostics work? (control panel/modems/highlight modem/pick diagnostics tab) if modem diagnostics work, you know you've got the driver in there right and mostly good modem hardware. but, most common failure mode i've seen in modems is inability to go off hook. which sounds like your problem. of course, you may actually have a bad phone line connection, or have the phone line plugged into the wrong jack on the modem. plug a phone into same phone line and listen for dial tone...if modem diagnostics work and you can here a dial tone and you are using the correct jack on the modem, you have a bad modem. try another one.

You have actually got two problems.
The shutdown problem is a bug in Win98.
No problem, go to microsoft.com and download the update.
But first you have to get the MODEM recognised.
Delete the MODEM in device manager.
Shut down.
Remove MODEM, and boot.
Check device manager to make sure there is no MODEM, and no yellow or red warnings present.
If there are (Probably will be) , delete (remove) them from Device Manager.
Reboot, repeat.
If no luck, run Antivirus.
If no virus, reload Win98.
When the PC is stable, and recognises all of the hardware (including the mouse), then insert the MODEM.
It should go through the MODEM install routine properly.
(For the Mouse: Check the BIOS setting for COM1 is IRQ 4 and I/O is 03F8.)
Regards, Chris

They have it right, but there is a shortcut if you have the modem driver handy on disk or in a file on the drive. Go to Device Mgr., highlight your modem (not the general modem entry), click remove, then the refresh button right next to remove. Whenit refreshes, it will find the hardware immed. if Plug & Pray (play), is installed, point to the file containing the driver, allow it to install, then reboot. It should work.

Also had a friend call me the other day about a brand new Dell (after she was on the phone w/ Dell for 2 hrs, couldn't get the thing online, and the phones in the house went dead each time she plugged in the phone line).

First question I had was "Are there 2 jacks side by side, and are you def. plugged into the side that say's "line", instead of "phone"? She said, no there's only 1 hole...I said that's the NIC card you are plugged in to, it fits...sorta, but sorta loose too. I told her to get a flashlight and find the actual modem, then plug it into the line side. She did then embarassingly said thank you in a sheepish hurried voice after I heard that magical dial tone over the cell phone she was talking on.

Good Luck.

First things first.
1 Buy a new mouse
2 Visit Netodragon website and find updated driver. If all this fails, get a hardware modem such as Intel, etc.