DLL (libraries) are bad removed from memory after being used, low-memory systems, etc. are some reasons for bad memory management of Windows 98.
I’m not a hardware or operational system specialist… I’m just an user that could say with some experience: Windows 9x and Me have lots of problems that were solved in NT systems (2000 or XP) and others in Vista.

Maybe Antivir works better on Windows 98.
But, take care, the support of Windows 98 by Antivir will end on June…
http://www.free-av.com/antivirus/allinonen.html

If you are using one antivirus for your main antivirus resident protection and the other for for on-demand access only there is no problem such as the conflicts you mention.You’ll find that is common practice
Yes you will have probs if you you are using 2 resident guards together but that is not want i am doing.

I hardly get any crashes at all with my winME setup and I run it for long periods of time without reboot 2 -3 days or so.

The disappearing icons has been mentioned elsewhere

http://forum.avast.com/index.php?PHPSESSID=3764141d288a236daed995733e4f14a7&topic=22604.msg187655#msg187655

in which the only programs installed were win98 and Avast.

Also it seems to only occur only when you scan from the main
scanner program and select scan folders.
SEE
http://forum.avast.com/index.php?topic=23914.msg196785#msg196785

If you rightclick the folder and select scan with Avast
it scans all the files in the folder including inside archives.

WITH NO LOSS OF ICONS AT ALL

Can you explain that? It is the same setting.
ie thorough and scan archives
yet one method causes the loss of your icons the other does not

Finally A reason to have another on-demand scanner

I scanned an archive with AntivirPE - It came up clean
I scanned it with Avast and it detected a Trojan.

Like I said b4 I not trying to be confrontational. I just want to get to the bottom of this problem.

As I said earlier, how exactly is it happening. Now I am not an a computer tech, but isn’t there a way to test this: a debugger or process program that would capture the process to file to see How The scanner is interacting with the windows/internet explorer shell to see where and how this adverse reaction is taking place.