I haven't tested it, but it appears to be capable of "faking" the presence of IE on 98 systems.
Additionally, it has an approach, very similar to Fred De Vorck's one for NT4/Win2k shell about using a renamed Shell32.dll to Shell32.w98.
Investigate and Fix 98Lite
Many people have reported some bug with 98Lite, and have difficulties to cop with Sleek or Micro desktops, patched or unfixed files, complains about missing Shell32.w98.
I wrote this tab to help about all this...
First some theory. Using Windows 95' shell with Windows 98 involves some changes in your system. You need three files to build up this shell: Explorer.exe (the main program, declared in System.ini), Shell32.dll (containing all desktop functions and subroutines for Explorer.exe), and Comdlg32.dll (containing all functions allowing to use an opening file windows as a small desktop, with everything, such as Context menu, deleting, renaming, copying, moving, ...). Simply replacing those three files with 95 version works well most of the time. Unfortunately, some applications are calling subroutines from Shell32.dll, that were not present in 95 version, resulting in various bugs... The solution is to lure those applications into finding the missing subroutine elsewhere. This quite simple, editing the application executable, you can read the name of the involved DLL, followed by the name of the called subroutines; then you change "SHELL32.DLL" to something else ( ie: "SHELL32.W98") and keep a copy of 98 version of Shell32.dll, in your system folder, named Shell32.w98. Though any call to function missing in the 95 version is found in 98 version!
One more thing needs patching: the desktop icons are a per-machine choice in Windows 95, and a per-user in Windows 98. So any 98 proggy changing desktop icons of a 95 desktop would show no result! The trick is patching Themes.exe and Plustab.dll to modify per-machine icons instead of per-user ones ( I would tell better to use included PlusTab.dll, see higher!).
Off course there're a lot of registry stuff to remove or modify to smooth everything, but that is the base of removing IE4/5 !
In the left side you can see some information, and the right part you can correct wrong things, or patch third party files needing functions from 98 version of Shell32.dll. If your shell is 98's, you can revert a previously patched file. I included an expert mode, allowing you to modify everything, even if not needed by your system. Use it wisely or for advanced experiments. BEWARE, you can mess up things with that! If you're a Lite-ing wizard, it can help you testing things faster...
I also automated the installation of Shell32.w98, if your system lacks it (be sure your setup path is correctly set, and insert Win98 CD if needed!).
Important: ProTab will not perform properly if files are currently in use (opened) in your system. Be sure not trying to patch notepad, if it's in use!
Maybe it is (part of) the missing step to run some 98 apps on Mindows?