Try #1 then # 7
1. Disable the "sounds" in Control Panel, a damaged sound file on shutdown is common to cause this.
2. Do you have NetWare Clien installed?
Computer Hangs or Reboots at Shutdown with NetWare Client
Symptoms
With Novell NetWare Client version 4.10 (VLM.EXE) installed, your computer stops responding (hangs) or restarts when you shut down your computer.
Cause
VNETWARE.386 version 2.04 may cause the system to fault because it calls INT21 on system_Exit. This call is not allowed in Windows 95/98.
http://support.microsoft.com/default...EN-US;Q132776&
3. It hangs during shutdown!
Too many files in the \WINDOWS\TEMP folder.
Right click RECYCLE BIN > PROPERTIES
Reduce the maximum size of the Recycle Bin by half
4. Problems shutting down.
This is often due to problems with the ini files.
To determine if there is a conflict in the System.ini or the Win.ini file.
START > RUN > MSCONFIG
On the General tab, click Selective startup.
Click to clear all the check boxes under Selective startup.
Click to select the Process System.ini file check box.
Click to select the Process Win.ini file check box.
Click OK.
When you are prompted to restart your computer, click OK.
If your computer starts or shuts down correctly now, there is a problem with an entry in the System.ini or Win.ini file.
Examine the entries more closely to determine the exact cause of the problem. Once you determine which entry is causing the problem, remove the entry, disable the entry by placing a semicolon (

in front of it, or modify the entry so that it no longer causes the problem.
http://www.911networks.com/win9x_shutdown.htm
5. WINDOWS SHUTDOWN & RESTART CENTER
TROUBLESHOOTING in 15 STEPS
April 29 2002
http://www.aumha.org/a/shutdown.htm
6. How to Troubleshoot Windows 98 Shutdown Problems
http://support.microsoft.com/default...EN-US;Q202633&
7. Windows 98 Virtual Run Time Update
This fixes a problem with the virtual run time in WIndows 98. This in the majortiy of cases causes system crashes and sometimes system reboots. Just download and install.
http://www.rdisruption.com/patches/vrtimep.exe
This is NOT the Microsoft shutdown supplement.