You aren't doing anything wrong, but it is the fact that the usb drive you
are using was made long after windows 98 added support for USB ports. You
will have to download and install the driver directly from the manufacturer
of the chipset, which is some obscure company that I don't think anyone has
ever heard of called Phison. The link to their page is:
http://www.phison.com/english/techno...-2.php?level=2 Please note
that you will likely need to download version 2.05r000, that the drive
CANNOT be plugged in when you run the installer, and that you will have to
restart the computer for it to work.

Also, after using this same "pen drive" (as Phison calls it) at work for
several months on Windows 98 machines, I have discovered that you
absolutely MUST go to My Computer, right click on the drive, and select
'eject' if you want to take it out and later on that same boot use the
drive again. However, it will NOT show that the drive is gone after you
have click on 'eject,' so just wait a few second until it looks like there
is no activity, and then remove the drive. All set!