This is where Open Source comes in. See, when software is "open source", that means it's free to be distributed with or without charge and altered as you see fit. Which also means it's just plain free. Things that are "based on open source" aren't necessarily open source THEMSELVES, though, so be careful. You can also update with the newest version of a program whenever you want, since it's free, whereas most used Win98 software are the old versions of programs that just stopped bothering with compatibility with older machines.
To make things easy, here's three really useful programs that should work fine on a Win98 machine:
The GIMP for Windows - basically, Photoshop. Except not. It does more or less everything Photoshop does, but doesn't cost $300. However, the manuals are all online, so that could be a problem if you were offline and needed a help file quick. Also, the official site only contains the code, which would have to be compiled into a program by the user. Fortunately, there are also sites with plain installers, which is more along your cup of tea. Right?
A nice browser that will run on Win98 is Firefox (link to direct download). That's the one you've been using the guest account on before. With the tabs and stuff. It has a lot of cool features and many extensions to make it even cooler. One problem, though, is that it can lag a bit. I doubt you'll have a problem with it, though.
Also available from the same programmers as Firefox is Thunderbird (direct link to download again!), a really nice email program. "But dudes," you say, "I use Yahoo! I don't need an email program and couldn't use one anyway!"
Au contraire. A local email program means that when you want to check your mail, you can just fire up the program-- no slogging through Yahoo and waiting for a million ads to load. You're going for DSL, so that's going to be really important. If the ads of today make a browser lag a bit on a cable connection, can you imagine what that'd be like on DSL? Ugh. Best not to risk it.
I'm going to post a tutorial on how to set up Thunderbird for a Yahoo mail account sometime soon. It involves using YPOPS! to provide POP3 access and no, that's not just a lot of nonsense jargon. Trust me, you'd like it.
Another great source for Win98 old-machine friendly software is mytae. Bug him a lot. And if he tosses you any install CDs, use them. The catboy isn't certified for nothing!