Sometimes a setting somewhere, perhaps ghostly and unseen will become fowled up for one reason or another. Often, ironically, use of Microsoft Network, Microsoft Mail or Microsoft Exchange will screw things up.
Solution: the best way to fix this is to do a partial or complete re-install of Windows 95/98.
(If you have Microsoft Plus, it would be a good idea to un-install it as well before continuing. After following the below procedure, you can re-install.)
Partial: Under My Computer, choose Control Panel. Under Control Panel, choose Network. Highlight TCP/IP or TCP/IP Dial-Up Adapter on the list of configurations and click the Remove button. (You may be asked to restart you computer.) Next, Under Control Panel, choose Add/Remove Programs. Click on the Windows Setup tab at the top. Next highlight Communications and click the Details button. On the Communications screen, uncheck Dial-Up Networking and click OK. Then click OK again. You will be asked to restart your computer. Now, go back in and do the reverse, re-installing Communications/Dial-Up Networking and TCP/IP.