What worked for me: changed from DSL cable modem to 56k
dial-up modem.
I was given a 3-year-old Dell with a habit of frequent
Windows 98 SE hangs, so I decided to scrub the hard-drive
down to the bare metal and reload all factory software.
Big mistake. After a couple of days/nights of continuous
trying, never could get past the scanning for available
updates screen stuck at O%. I finally decided to switch
from my standard cable modem to my 56k modem to connect to
Windows Update, and slowly I got all Win98SE updates
downloaded and installed.
No problems with other MS sites for downloading updates
for Office 2000, and IE.
Even with a completely rebuilt system, with all the latest
MS patches applied and MS defaults, I still get stuck at
0% with cable modem and painfully get there with 56k modem.