U3 software WILL NOT RUN on Windows 98 (and NO, there are no drivers that you can get to run it on Win98).
My Memorex flash drive and a bunch of other flash drives seem to run this U3 software.

Do you specifically know of any USB flash drives that will run on Win98?

I have just bought a Kingmax 4GB flash drive a few hours ago.. I haven't tried it yet but according to the accompanying info leaflet, it says it supports Windows XP/2000/ME, Linux with Kernel 2.4 and MAC OSX(no drivers needed) but for Windows 98/SE it needs 'driver which is available for free download at' www.kingmaxdigi.com/support/download.htm