Not only Microsoft is not providing support for WIN98SE (also WIN98, WINMe), they will pull the plug on downloading fixes, security updates via WINDOWS Updates.
I understand the cutoff date for WINDOWS Update for WIN89 series is June 30, 2006.
Go with XP, Shop around on Fatwallet.com or Slickdeals.com for links to deals. I just picked up XP Pro (upgrade) for $70 after rebate / coupons from Staples. I saw XP Home going for under $50 last week. Of course MS Vista will be out in 5 months, but who wants to spend $200 - $300 for for the opportunity to help Microsoft debug their newest creation.