I've got an Iriver 790 (256mb). Small but a great device. Not sure about Win98 though. It will work with USB 1.1 but a lot slower. One drawback, you can't transfer mp3s from the device to the pc unless it's a mp3 created by the recorder on the device.

On the plus side...it is a great little device for recording yourself during practice. High quality built in mic..and the capability to plug in an external mic. The latter allows you to set rec volume.