What directories and/or files should I back-up to ensure re-loading
Windows 98SE fully updated in the event of a bad crash?  I understand
that Microsoft will shortly cease support for this OS and one will not
be able to rely on auto-updates.

Hello, I am not a researcher, but I will supply an answer anyway.  Go
to http://www.microsoft.com/windows98/downloads/default.asp .  About
1/4th of the way down the page there is a link for "update for
corporate it"  select this option, it will check your system and allow
you to download the full install of the updates that you could then
burn on a cd.  When/if your system crashes, you can reinstall windows
and then install the update from the cd.  They also have a phone
number in which you can order the cd.
Unfortunatly you are unable to "slipstream" (explained here:
http://www.windows-help.net/WindowsXP/winxp-sp1-bootcd.html ) windows
prior to 2000.  Hope this helps.

Hi Dutchcleeve, 

I am answering your question assuming that you are referring to
reloading the Operating System when your system crashes.

Well in the above scenario you will need to do the following: 

1. Open Windows Explorer. 
2. Make sure your Windows 98 CD is inserted into the CD ROM drive. 
3. Now, you should see a directory called Win98 in CD. 
4. Copy that directory and paste it in your hard drive. If you have
two partition in your Drive namely C: and D:, then preferably copy the
directory in your D: drive.
This folder (Win98) contains all the cab files needed to reinstall the
Operating System.

The procedure to reinstall the Windows 98 if your system is crashed
and is not booting (ie when you donot have a Windows 98 CD but have a
backup of Win98 in your hard drive in the D drive)

1. Change the boot sequence to Floopy drive in your BIOS. 
2. Insert the Windows 98 Start Up disk. 
3. Restart your computer, and choose the option "Without CD ROM
Support"
4. You should now be at the A: prompt. 
5. Type the command D: and press enter. 
6. Now type in Cd win98 and press enter. 
7. Type setup and press enter. 
This would begin the installation. 

Let me know if this is not the solution you are looking for. 

Regards, 
kumaran