I have built several PC's with the following configuration for my work:
Enlight 7237-0X3 mid-tower case
Epox 8KHAL motherboard
AMD Athlon XP 1800+ (1.53GHz) CPU
Thermaltake Volcano 6Cu CPU cooling fan
256MB PC2100 RAM
20GB Maxtor D740X hard drive
Mitsumi 1.44 floppy drive
Sony 52X CD-ROM
ATI Xpert 2000 32MB AGP video card
Netgear FA311 network card
Mitsumi PS/2 keyboard
Mitsumi PS/2 scroll mouse
Windows 2000 Pro / Windows 98 SE operating system
All the components seem to be pretty reliable and that configuration runs me just over $600, shipping included.
For my next PC, I'm planning to go with the MSI KT3 Ultra motherboard instead the older Epox mobo.
I would suggest an upgraded video card from what I have listed above if you're going to do any kind of real gaming. Since it doesn't sound like you're a devoted gamer, it doesn't make sense to spend $200-300 on the video card. I'd recommend something like maybe the Abit Siluro Geforce3 Ti200, which runs about $120.
You might also like to get a CD-R/W drive instead of the CD-ROM drive I have listed. If so, the Lite-On 40x12x48 LTR-40125S is a good choice and can be had for around $71.
If you have Windows 98 [b]Second Edition[/b], you're probably fine to build another machine with it. Windows 2000 or Windows XP would be more stable, but considering you already Win 98, it would be okay, too. However, if you have the original Windows 98 (no Second Edition), I wouldn't recommend it. Win98 first edition was incredibly buggy.
My favorite vendors for components are [url]www.newegg.com[/url], [url]www.allstarshop.com[/url], and [url]www.crucial.com[/url] for memory. They have good prices and I've had good customer service from them, too. You can check up on vendors at [url]www.resellerratings.com[/url].
Assuming you keep your monitor, case, hard drive, floppy drive, and OS, you'll end up somewhere in the $400 neighborhood for a pretty darn good system:
already have case
MSI KT3 Ultra motherboard: $81 from Newegg
AMD Athlon XP 1800+ (1.53GHz) CPU: $99 from Newegg
Thermaltake Volcano 6Cu CPU fan: $8.5 from Allstarshop
256MB PC2100 RAM: $44 from Crucial
already have Maxtor hard drive
already have floppy drive (I assume)
Sony 52X CD-ROM: $26 from Allstarshop
or Lite-On 40x12x48 LTR-40125S CD-R/W: $71 from Newegg
Abit Siluro Geforce3 Ti200 64MB AGP video card: $119 from Allstarshop
Netgear FA311 network card: $13 from Allstarshop
Mitsumi PS/2 keyboard: $7 from Allstarshop
Mitsumi PS/2 scroll mouse: $3.5 from Allstarshop
already have operating system (assuming Win 98 SE)
Shipping from Allstarshop: ~$20
Shipping from Crucial and Newegg included in prices