Did you have a Win98 CD in the CD-ROM drive at the time as you weren't pointing to it for the "restore from" location.
http://www.duxcw.com/dcforum/DCForumID7/96.html might help a bit but you may need to remove your networking device, reboot the computer and allow Windows to rebuild the protocols for it.
How are you running Windows 98SE if you only have Windows 98 on CD?