There is no system restore in Windows 98 and 98SE. System restore was started from Win ME. But you still have 3 options:
1- Upgrade to Win ME or XP. -> The easiest thing to do since ME/XP supports system restore.
2- Use this program to create restore points in 98SE:
Winbakup system restore for win 98
3- Be satisfied with the registry backups that Win 98SE creates every time you boot the system.
To restore a previously saved registry backup:
Go to Start -> Run... type in msconfig and on the General tab go to advanced and check "enable startup menu". Closeout and reboot...
On the startup menu choose #4 command prompt.
At the prompt type:
scanreg /restore [Enter]
After the scan you will be given an option (with dates and times) of some prior restorable registries ... (unfortunately if you have rebooted several times before attempting this you may be bumped out of a useful restorable range because the registry tends to get backed up with each reboot and Windows I think defaults between 3-5 restorable registries)
You can Edit Scanreg.ini and change the MaxBackupCopies=5 to 15 or whatever you want.
You should be able to potentially choose a restorable registry from a date/time prior to whatever is the recent conflict...
Highlight and choose restore... after receiving confirmation of a successful registry restore... reboot.
Be sure to go back to msconfig: General/advanced and uncheck the
"enable startup menu"... so you'll boot directly into Windows...
Source: Neowin forums