Try going into Safe Mode and resetting the video adapter
to standard VGA, then reboot.

If you get to the Desktop, reinstall the video adapter drivers.

Click File> Run, and type   System.ini   and click OK.
In the first section of the System.ini file, somewhere under the heading
[boot]
it should say
shell=explorer.exe

Does the 'shell=' line say that, or something else?
If something else, change it to explorer.exe, and click File>Save, then close the System.ini file and reboot.

If it already does show shell=explorer.exe, then you may need to reinstall Internet Explorer.
See here for details -
Recovering From a Failed Internet Explorer Upgrade in Windows 98:
http://www.cs.bsu.edu/~gjjones/administrivia/stories/2003/03/21/recoveringFromAF
ailedInternetExplorerUpgradeInWindows98.html

Especially this section at the end:
"If you still have boot problems after you reboot, you should use the command prompt to edit the c:\windows\system.ini file. On the command line type edit c:\windows\system.ini.

"Once it is open, change the line shell=explorer.exe to shell=progman.exe. What you are doing here is changing the default shell (that is having problems) from the Windows Explorer to the old Windows Program Manager shell.

"Reboot Windows. It should now successfully boot with no errors into an empty Program Manager shell. Use the File | Run | Browse drop down menu selection to browse to c:\program files\internet explorer and launch ie5setup.exe or ie6setup.exe (depending on what is there). Do a custom install and check all the Bold faced options. When the setup program alerts you that these files are already installed, tell it to reinstall all of the files.

"When the Internet Explorer Setup program is done and reboots, hit the F8 key to bring up a Boot Menu. Choose Command Prompt and boot to the command prompt. Once there, type edit c:\windows\system.ini and, once it is open, change the line shell=progman.exe back to shell=explorer.exe. Save and exit the file. You have now set the shell back to the original value."