I agree; simply move your stuff off of the hard drive; then get a copy of Windows 2000 Pro; and do a clean install OVER Windows 98; that way; no formating is needed; and everything will be good as new.
Win2k Pro IS the most stable OS available out there; I like it even better than WinXP. No more Blue Screens of Death (that is, No Crashes.)
After that; you just show your your father the basics of how the IE browser works; point him to Free Republic.. and he'll never be bored again!