According to MS, windows 98 in THEORY support upto 2 gig memory but it was never tested IRL because of the high memory prices back then...
so install win XP instead...it's so much better at memory handling than win98.
btw: i have managed to install 1,3 gig of memory in a win98 machine but i had to limit windows to using only 1 gig of it...but it showed 1,3 while booting. :-D