I agree with Bassbag about the memory. I also use W98SE fully patched & updated. I had absolutely no problems installing and running all parts of avast!4 home. But, then, I also have 640 megs of ram which is probably more than I need. But, I have no problems with running whatever programs I want or need to run. There are over 20 processes running after start-up with 8 icons on the Taskbar … not counting the clock. 
One other thing I see in your setup. Upgrading to IE6 will be better than IE5.5 but get more ram first. Then visit Windows Update site for IE6. 