I have to say that when the same thing happened to me re trying to remove a
program using the add/remove programs facility, it seemed to indicate a
corruption of the Windows installer. I had other problems as well, in as
much that I found that the Add/Remove Programs facility had in fact stopped
recording any new additions to the PC. I managed to make that work again by
down loading the MS Tweak UI program which found the problem and corrected
it.

I don't appear to have had any problems with the update but feel free to let
us know what difficulties you are having. Go though the following to check
what is happening.
Check the registry entry:-
HKLM\Software\Microsoft\Windows\CurrentVersion\Setup\Updates\W98SE for this
update. The entry under it should show two files. Check to see if they tally
with the update version. You may have loaded another later patch which has
over written the files with a later version. (Word 2000 has a later version
of msconv97.dll).
Using the Find facility, look for both files, check the locations and the
versions. If the Registry and Find both confirm the correct/same status of
the files, then that is what is loaded.
You can also go to Start\Programs\Accessories\System Tools\ System
Information and then select Tools. Locate Version Conflict Manager and run
it. Look for the two programs in question. It should have the current and
previous versions. In the unlikely event of the old version not being
available, you will have to run the System File Checker to extract the files
from the Windows CD to replace it. If the old versions are available then
you can use the Version Conflict Manager to swap the status of the files.
Once you have the old files loaded, you can then run the patch again.

Of course ensure you have backed up the Registry before you do anything and
know how to locate and reinstall the previous version of it before making
any changes.

Alan