It's NOT true.

It is not true--you have to buy an upgrade if you can find it.  Here is my
standard blurb:

MS can no longer sell W98 disks as an initial purchase so your best bet is
to try to find  another source; however, supplies of W98 are becoming very
limited.  Go to http://www.pricewatch.com, scroll to the software section,
click on Operating Systems and click Windows 98.  They may have listings on
boot up floppy disks, CDs but no license, a license but no CD, OEM versions,
W98 and W98SE CDs, update from W98 to W98SE only and so on.  Pay ATTENTION
to what the listings say or you may end up with something you don't want or
need.  You can also check on EBay or other auction sites.  Be aware that
only paid support for W98 still exists.  Here's some info about the various
types of W98SE CDs:

RETAIL FULL INSTALL:  This CD will either upgrade W95/98 to SE or you can
install it to a blank hard drive.

RETAIL UPGRADE INSTALL:  This CD will either upgrade W95/98 to SE or you can
install it to a blank hard drive; however, when installing to a blank drive,
install will ask to see the qualifying system (i.e., W95) disk(s).

OEM FULL INSTALL.  This SE CD is designed to be installed to a blank hard
drive; however, there is a good possibility that you can trick it into
upgrading.  For info, go to:
http://home.satx.rr.com/badour/html/upgrade.html  Be aware that if you buy
an OEM disk, it might be customized for installation on a particular
computer; however, this will probably be primarily with a used disk.

UPDATE CD:  This CD will only update a functioning copy of W98 to W98SE.
When MS sold them, they were $20 and came with a ProductKey.  Some venders
were selling them and advising customers to use the W98 ProductKey which may
or may not work--don't get stung.  This outfit is selling them for $35:
http://www.micronetxp.net/Merchant2/merchant.mvc?Screen=PROD&Store_Code=AB&Produ
ct_Code=WIN98SE&Product_Count=&Category_Code=

RECOVERY CD:  Some companies will brand an OEM CD and call it a recovery CD.
You should avoid these unless it is the exact recovery CD you are looking
for.  Many recovery CDs will only install on the equipment they were
intended for.