Give me a clean load of 98SE on a PII 400 mhz with 128mb of ram, and I’ll show you a machine that zips through web browsing, and word processing programs, faster than any open source kludge patched to the hilt to “fit into the system”.
You may want to dip your feet a bit into the open source world. I can think of five modern distros off the top of my head that are far superior to Win98, and would run perfectly on the machine you spec'd.
I can think of about 10 modern distros, that blow the socks off of Win98. Problem is, the minute I load one on a user's computer, I may as well station a technician there, for the next two weeks.
The problem I have with Open Source, as IT, is the knowledge level of the users. Your average novice, is lost, when it comes to OSS... regardless of how "user friendly" the disto might be. It ain't winders.... and I'm not a babysitter.
On top of the fact, that I have anywhere from 100 - 200 new users every year, I've got to consider the help desk side of the equation. The vast majority of 98 problems are known, and documented, and I've got some great "cheat sheets", that allow even a relatively untrained help desk person, to walk someone through something simple, like finding a .pdf file they've downloaded, and lost, or adding a printer, or ....
With something like 20,000 trouble tickets a year, and 5 technicians, I like to have 90% of them resolved in 5 minutes or less, and a single phone call, 10% resolved in a 15 minute visit, and the remaining 10% take up 90% of the available hours. That's impossible to do with open source.