Explorer caused an error in kernel32.dll
Ok, first of all, try this.
In your Windows directory look for a folder called "APPLOG". It's a hidden folder so you may have to enable viewing of hidden folder's.
Skip this small text part if you can find that folder in your windows directory.
In Windows XP the following will display hidden files and folders, I think it should be the same with 98.
In Exploter (Windows Exporer, not Internet Explorer) fo to Tools > Folder Options
When the options open up click on the "View" tab. There is a "Hidden Files and Folders section in which you need to select "Show hidden files and folders".
Click apply, then "OK".
Once you find the "APPLOG" folder rename it to "APPLOG2".
To rename it right click on it and click "Rename"
See if that solves it or causes and problems. If it causes any problems reame the folder to it's original name.
That's the simplest and safest way to solve it.
Below is another method.
Microsoft Knowledge Base Article - 187965 wrote:
RESOLUTION
To resolve this issue, use the following steps:
Click Start, point to Find, and then click Files Or Folders.
In the Named box, type *.pwl, and then click Find Now.
In the list of found files, right-click each file, and then click Delete. Repeat step 3 until all of the .pwl files are deleted.
On the File menu, click Close.
Restart the computer. The password list files are re-created automatically when you log on to Windows.
Download the Mspwlupd.exe file from the following Microsoft Web site, and then double-click the file to run it.
NOTE: You do not need to perform this step if you are running Windows 95 OSR2 or Windows 98.The following file is available for download from the Microsoft Download Center:
http://download.microsoft.com/download/win95/update/95/w95/en-us/mspwlupd.exe
http://support.microsoft.com/default.aspx?scid=http://support.microsoft.com:80/support/kb/articles/q187/9/65.asp&NoWebContent=1