There was a post recently that also talked about that problem, Scooronimudge. Seemingly it's the motherboard that's needed for the XP2800 processor that wont work with Win 98SE. The other hardware you mentioned are okay though, but 512MB of RAM is about the upper recommended limit for 98.
I use 640Mb Ram and a 120Gb HD with no problems on Win 98 SE. there is a 'Large drive patch' from MS which gets over the HD size limitation... I am not aware of a memory limit, must depend on the motherboard.
I think it only cirtain motherboards that will not run Win98 as they are aimed at 'XP' and above.
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