The CABS files are used only when you change something, such as installing or removing a protocol or windows component. What WILL cause conflicts is trying to make a change to Win98 using the Win95 cabs, although Win98 looks for its own CAB's, so itwill probably just not find the 95 versions.
If you updated a windows 95 machine to windows 98, and you have the CD you used for the upgrade, you can do the following:
- delete everything in c:\windows\options\cabs
- copy the entire contents of the win98 folder from the CD into c:\windows\options\cabs