Okay I think the DEL is not correctly implmented on Windows 9x with the WININIT.INI file.

An example entry after using is:
[rename]
C:\WINDOWS\Temporary Internet Files\Content.IE5\index.dat=NUL

This is wrong for 2 reasons.
1. Long file names are not supported at that point in time
2. The DestinationFileName (in this case NUL) comes first not last

Working example:
[rename]
NUL=C:\WINDOWS\TEMPOR~1\CONTENT.IE5\INDEX.DAT


Further explanation can be found in this KB

How To Move Files That Are Currently in Use
http://support.microsoft.com/kb/140570
 
Quote:


The syntax of the [rename] section is:
DestinationFileName=SourceFileName
 
DestinationFileName and SourceFileName must reside on the same volume and be short (8.3) file names because Wininit.ini is processed before the protected mode disk system is loaded, and long file names are only available when the protected mode disk system is running. Destination and source files specified in Wininit.ini with long file names are ignored.