The symptom: If you install more than 512 MB of RAM in a system running Windows 9x (that’s any version of Windows 95, 98, 98SE, or ME), you get weird out of memory errors. Here’s how to get around those memory limitations to make Windows 95 and Windows 98 work with 2 GB of RAM.
The culprit is a bug in Windows 9x’s disk cache. The solution is to limit the cache to use 512MB of memory, or less, which is a good thing to do anyway.