I have an old box running 98se and found downloading and istalling AVG 7.5 a compounding issue. If you are having the same issues I would recommend uninstalling AVG 7.5 and re-installing. HOWEVER, this time use the Custom Setup and uncheck the Install Boot Scanner option.
Also should be noted that I had Symantec (Norton SystemWorks 2003) installed, Spybot 1.5.2 and Spyware Blaster 4.0. I uninstalled all of these to get to the bare-bones of WIN98se and find what AVG would do.
This might be a waste of time for many, but believe me, most hackers have given up on 98 and the platform can be a good way to surf and email to good friends and family, especially if the people involved have a limited budget.