Its funny but I managed to solve the problem as follows:

Get the latest version of Kix and install as per the documentation!

Make sure that the Kx32 and 16 dlls are copied to windows\system folder but do not copy the 95.dll - this I think was the real cause of the problem! Also rename Kix32 to lmscript.exe.

I then installed the latest version of the intranetware client (which has support for W98) and hey presto...it runs fine on W98 and W98 clients.

Let me know if I can be of any further assistance.

Steven