well more has progressed since this happened to us...

I pulled this off of Computing.net:

FINALLY!! This did it for me:
Your problem sounds like it's being caused by a corrupted registry entry. In Windows 98, you can try this... Make a backup copy of your registry. Then navigate to H_key_Local_Machine, System, Services. Delete the Winsock2 folder. Then uninstall dial-up networking and re-install it. The re-install will recreate the Winsock2 entries in the registry, and you should be back in business. Very important----> ALWAYS make a backup of your registry before fooling with it, so if something doesn't work as planned you can recover. Let me know if this works.

Looks like it's not nessecarily the OS... I still remember reading something about leaked network sockets on Microsofts Knowledge Base... strange... ;-)

Hope this might work for you...