I'm experiencing the same problem, using a SoundBlaster PCI128 sound card with win98, 500mhz, 128RAM.
I haven't had any luck installing winME/2000 drivers, or even the latest win98 driver, for that matter. the only driver that I've ever been able to use is the oldest win98 driver.
This is what happens when I try to install a driver: I download the file and unzip. Run the setup prgram and it does it's thing, when it comes to a window saying something about initializing the web autoupdate (or something along those lines... I don't remember)at that point, the windows driver installation wizard comes up and asks me to search for the latest drivers with only "microsoft windows update" toggled it searches and finds nothing, exit that and the window from the original setup program which says initialzing autoupdate is still there, and it doesn't do anything past that. (waited a few minutes with nothing noticeble happening) I had to shut the computer down to reboot - windows wouldn't shut down manually, it'd keep coming back to the desktop.