I am assuming that PC1 is connected to the internet and running Internet Connection Sharing?
Your problem is that PC1 and PC2 are connected in one subnet and PC2 and PC3 are connected in a different subnet. PC2 is networked with both of the others and can therefore communicate with them. PC1 and PC3 being in different subnets cannot communicate.
Had PC2 been the XP PC, "bridging" the two network adapters might have overcome the problem, that option isn't available in 98SE.
If PC1 has Internet Connection Sharing enabled, its Wireless Network Connection will have the IP address 192.168.0.1 and PC2's IP address will be in the same 192.168.0.xxx range (subnet).
PC2's Local Area Connection for the "wired" LAN will be in a subnet with a different number in the third octet of the IP address, for example 192.168.1.1 and it is the Subnet Mask of 255.255.255.0 which prevents the 192.168.0.0 and 192.168.1.0 subnets from communicating.
Changing the Subnet Mask throughout to 255.255.0.0 should allow subnets with a different third octet in the address to communicate. To do this, however, requires that you manually configure the IP addressing and this might prevent Internet Connection Sharing from working. In any case, PC3 is unlikely to have internet access without being networked directly with the ICS "Host" PC.