Make sure that your USB port is working. Right click on My Computer and select Properties then click on Device Manager and you should not see any yellow exclamation points (note that you should have your flash drive plugged in).
If you do see yellow exclamation points then click on it and Remover it. Then restart your computer after you have removed all exclamation points. Windows should then reinstall the driver correctly. You should check this once you restart. If you still have troubles, it may be because windows require a specific driver for this.
The flash drive itself probably doesn’t have any software but you might want to check the manufactures website as there may be known issues when plugging it in to a win98 machine.
Some Flash drives have a slide switch that makes them write protected. You might want to check for one on yours. If that’s not the issue, I would go to the manufacturer’s web site.
Different drives have different features. You may need to download a utility to reformat it. Flash drives usually work with Windows XP right out of the box. For Windows 98, you usually need to install drivers for the particular drive that you have.