I had a look at your problem just after you posted eary this morning.Was not sure that i understood what is going on.
Thought you had got your Windows Explorer.exe confused with internet explorer.exe.I also considered you had poss a bad update of IE5 as it appears to only have one choice in the add/remove programs for it.
Considered at some stage you may have had a virus,but you don't mention anything about a virus scan or any error messages.
I would suggest that your problem is wide spread through-out your pc and i think you have issues with your registry and corrupt files within the windows installation.
"I could also be very wrong"
You could go for a quick re-install of windows 98 over itself and see if that cures the problem. It may give you a chance to keep all software programs that are installed and running properly,if that be the case.
If it was me, i would not hesitate to reformat and do a repeat clean install of windows.
Unless someone can come up with a better idea.