Windows 98 Second Edition:
Windows 98 Second Edition (often shortened to SE) is an update to Windows 98, released on May 5, 1999. It includes fixes for many minor issues, improved USB support, and the replacement of Internet Explorer 4.0 with the significantly faster Internet Explorer 5. Also included is Internet Connection Sharing, which allows multiple computers on a LAN to share a single Internet connection through Network Address Translation.

Other features in the update include Microsoft NetMeeting 3.0 and integrated support for DVD-ROM drives. Most importantly a memory overflow issue was resolved which in the older version of Windows 98 would crash most systems if left running for 48 hours. However, it is not a free upgrade for Windows 98, but a stand-alone product. Also included on the CD-ROM is the option to install Microsoft Plus! themes for Windows 98.

New Driver Standards:
Windows 98 was the first operating system to use the Windows Driver Model (WDM). This fact was not well published when Windows 98 was released and most hardware producers continued to develop drivers for the older driver standard, VxD. This resulted in the misconception that Windows 98 can use only VxD drivers. The WDM standard spread years after its release, mostly through Windows 2000 and Windows XP, because these systems are not compatible with the older VxD standard.

Today, even if hardware producers are not developing drivers optimized for Windows 98, the drivers written to WDM standards are compatible with Windows 98–based systems.