I had a problem doing this too. I just upgraded to XP problem solved. BTW I also bought the USB cable for my Sony Ericcson T68i so I can charge it up from the laptop as well as d/load from the data suite. click here very fast postal; services and the usb cable is much cheaper than XP
I never did get infrared working properly with win98se it was a hit n miss affair.
Have you looked in the Bios to see if there are any IR settings in there that might help get it working?