Hmm, I recently installed Windows 98 SE in VMWare workstation, but although the VMWare tools installed properly, I couldn't get sound or networking to work. Then I tried it in VPC, and that worked fine.
Sven, I think the reason it worked for you is because you installed Windows 98 SE while I installed Windows 98. Windows 98 SE has updated components, so you would be less likely to get the following error message:
"Product VMWare Tools -- Error 1723.There is a problem with this Windows Installer package. A DLL required for this install to complete could not be run. Contact your support personnel or package vendor. Action VM_LogStart, entry: VMLogStart, library: C:\WINDOWS\TEMP\MSI133.TMP"
Anyway, I managed to find a mirror for the Windows Script Host: