You are right the SetTime should set both date and time, if it dos not work, it could be part of the Y2K problem. I don't know if this is relevant for Win98 , but in Win95 you have to set set the format for shortdate to dd-MM-yyyy not the default dd-MM-yy.
(Found in : Controlpanel/International/Date)

On my workstation, I use Win95 there is no problem setting both date and time.