Perhaps a visit to Symantec's Threat Explorer will give you food for thought: Threat Explorer - Symantec Corp.
Clicking on ten of the latest viruses at random revealed that Windows 98 was susceptible to all of them. Though many viruses are now written with Windows XP/Vista in mind, the majority are still a threat for users on older operating systems including Windows 98.
I too would recommend AVG as probably the best free anti virus application available. Regular program updates and a fairly swift response to new threats makes this an essential piece of kit for anyone without at least basic AV software.