why does my system hang?

when entering a url in the address bar IE 5.0, win 98, the system hangs and freezes. when i reboot (ctrl+alt+del) i get the blue screen message “system busy”. this happens when running other programs as well. ran scan disk, defrag, checked for virus. all seems well.
also, when reloading win 98, during setup i get the hour glass icon. nothing happens and i have to reboot. what can be the problem and how to correct?