My experience is that it looks in the wrong cab for the file. Extracting the file from the correct cab and pointing it at that usually solved the problem for me. I came to the conclusion that Win98 (and 95) were packaged differently at different times. So despite the fact that two CDs were both 98SE, they would have different files in different places. I don't know if that's an OEM vs Retail difference or if it was just another way for Microsoft to screw with you.
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Bitt Faulk