As I have way too much time on my hands, I found a old Windows 98 SE CD (which I promptly made into an ISO) and installed it into VirtualBox 4. Installed just fine (comes stock with IE 4).
Proceeded to install IE6Setup and a nice pack of updates which someone was kind enough to roll up into one package. To my surprise, Windows Update actually still worked for Win98 SE (amazing since support ended in 2006), but I have all the updates in (DirectX 9.0c, IE 6 SP1, .Net, etc). Win98 does not appear to validate with Microsoft's site, so as long as you have your product key (or access to one), it should work just fine.