ahhhhhh... the joy.
Some things to check, then I'll try to explain.
1. Go into the device manager and click the plus next to "computer". What is listed there? It should say something along the lines of "ACPI compliant uniprocessor system" (I could be off slightly... but ACPI is what we're looking for here).
IF you don't see ACPI something or other under the computer section, you'll need to get that up and running. This is the most likely problem, altho there is a slight chance you dont have ACPI or power management enabled in the BIOS.
FYI... ACPI is the "Advanced Configuration and Power Interface". This controls such things as automatic powering up on modem/lan/usb/power restored, automatic powering down, resource (IRQ) configuration, and several other things that most standard computers nowaday use.
If you have "standard PC" or something like that, the OS does not have the ability to control the above mentioned things, (probably) cant go into standby or hybernate, etc...
If this is the case, let me know and I'll step you thru changing it out to work properly.
You might also get better results doing a clean install of your new OS rather than upgrading (even if you only have an upgrade cd, you can do it if you have the old win98 cd).
Good luck!