J-E-T-S JETS! JETS!! JETS!!!
Windows 98 doesn't like you to load DOS drivers, especially CDROM drivers from Autoexec.bat/Config.sys. This is the likely cause of your problem. The steps I would follow are:
1. Carefully review the files above. You can either look at them using NotePad, or by running msconfig.exe (System Configuration Utility.) A clean Win98 installation doesn't doesn't even use these files. The problems arise when you either have left over junk from a Win95 installation (which Win98 usually REMs out) or, more usually, you have installed a device using outdated software that assumes you'd like to have DOS drivers installed. If you are not familiar with these files, you can open them in NotePad, and copy/paste the contents into a reply to this thread. We'll have a look. Or, you can usually get away with simply unchecking the appropriate boxes under "Selective Startup" in MSCONFIG.
2. The above will stop the problem from recreating itself, but it isn't likely to fix it. For that, what you have to do is go into Safe Mode (boot while holding down the Ctrl key, choose the appropriate item from the menu) then go to Device Manager and remove ALL drives and IDE controllers. While you're there, check for any other "Unknown", or Problem devices, and delete them also. Lastly, check to see if *any* devices are duplicated, and if so, remove *all* instances of those devices. Reboot, and let Windows reinstall.
3. In some cases, nothing short of a reinstall of Windows over itself will finally resolve the Real-Mode issue. If this turns out to be the case, come on back for some hints on that procedure.
The above covers the usual culprits. Bad BIOS settings, MoBo or other hardware problems, issues involving large HDDs, multiple drive configurations... These, too, can be involved. But look at the above, first.