I have to admit though that all my NIC's are 10/100. Could this be the problem? Should I get a dedicated 10mbps card?

No, this is not an issue. The problem arrises when it's a 100mbps only NIC, although those are quite rare. (I still ask, just due to personal experience). A 10/100 will work fine.

I'm pretty sure peter nail this one, the subnet issue is probably playing havoc with what Win98 can deal with. Changing the empeg over to 192.168.1.2 and the NIC to 192.168.1.1 sounds like the best idea if you are not going to get a hub.

And if you do get a hub, definitly look into the ones that can also do internet sharing and such. I've been very impressed with the ones I have seen and worked with, almost to the point of replacing my dedicated Linux server with one.