Microsoft CEO Bill Gates was highlighting the operating system's ease of use and enhanced support for Plug and Play (PnP).

However, when presentation assistant Chris Capossela plugged a USB scanner in, the operating system crashed, displaying a Blue Screen of Death.

[14] The company was facing pending legal action for allowing free downloads of, and planning to ship Windows licenses with, Internet Explorer 4.0 in an alleged effort to expand its software monopoly.

Besides Internet Explorer, many other Internet companion applications are included such as Outlook Express,[20] Windows Address Book, FrontPage Express,[21] Microsoft Chat, Personal Web Server and a Web Publishing Wizard, and NetShow.

[22] NetMeeting allows multiple users to hold conference calls and work with each other on a document.

[23] The Windows 98 shell is web-integrated;[24] it contains deskbands, Active Desktop, Channels,[25] ability to minimize foreground windows by clicking their button on the taskbar,[26] single-click launching, Back and Forward navigation buttons,[27] favorites, and address bar in Windows Explorer, image thumbnails,[28] folder infotips and Web view in folders, and folder customization through HTML-based templates.

[29] Another feature of this new shell is that dialog boxes[clarification needed] show up in the Alt-Tab sequence.

[30] Title bars of windows and dialog boxes support two-color gradients, a feature ported from and refined from Microsoft Office 95.

[32] The Quick Res and Telephony Location Manager Windows 95 PowerToys are integrated into the core operating system.

[38] A Microsoft GS Wavetable Synthesizer licensed from Roland shipped with Windows 98 for WDM audio drivers.

Windows 98 also includes a WDM streaming class driver (Stream.sys) to address real time multimedia data stream processing requirements and a WDM kernel-mode video transport for enhanced video playback and capture.

WebTV for Windows utilized BDA to allow viewing television on the computer if a compatible TV tuner card is installed.

The DHCP client has been enhanced to include address assignment conflict detection and longer timeout intervals.

Multilink channel aggregation enables users to combine all available dial-up lines to achieve higher transfer speeds.

The IrDA stack in Windows 98 supports networking profiles over the IrCOMM kernel-mode driver.

However, the cache parameters needed manual tuning as it degraded performance by consuming too much memory and not releasing it quickly enough, forcing paging to occur far too early.

This results in more memory being available to run applications, and lesser usage of the swap file.

However, this can cause Windows 98 to hang instead of shutting down the computer if a buggy driver is active, so Microsoft supplied instructions for disabling the feature.

ScanRegW tests the registry's integrity and saves a backup copy each time Windows successfully boots.

[63] Windows Script Host, with VBScript and JScript engines is built-in and upgradeable to version 5.6.

[64] This tool was introduced to resolve the DLL hell issue and was replaced in Windows Me by System File Protection.

Windows 98 Setup simplifies installation, reducing the bulk of user input required.

[75] Other features in the update include DirectX 6.1 which introduced major improvements to DirectSound and the introduction of DirectMusic,[75] improvements to Asynchronous Transfer Mode support (IP/ATM, PPP/ATM and WinSock 2/ATM support), Windows Media Player 6.1 replacing the older Media Player 4.1,[73] Microsoft NetMeeting 3.0,[78] MDAC 2.1 and WMI.

USB audio device class support is present from Windows 98 SE onwards.

A 3+1⁄2-inch floppy disk version was available for older machines, albeit only via mail order.

[85] The original release of Windows 98 may fail to boot on computers with a processor faster than 2.1 GHz.

[87] Windows 98 may have problems running on hard drives of capacities larger than 32 GB in systems with certain Phoenix BIOS configurations.

[98] Michael Sweet of Smart Computing characterized it as heavily integrating features of the web browser, and found file and folder navigation easier.

[97]: 30–31  Ed Bott of PC Computing lauded the bug fixes, easier troubleshooting, and support for hardware advances such as DVD players and USB.

[101] After a legal dispute and subsequent settlement with Sun Microsystems over the former's Java Virtual Machine, Microsoft ceased distributing the operating system on December 15, 2003,[102] and IDC estimated that a total of 58 million copies were installed worldwide by then.