if you go to device manager do you see an X or ! next to the sound card?
If so, delete it and try again.
If not, go into Sounds or Multimedia in Control Panel (don't remember what it is called in 98se) and check the settings. Make sure the .wav and .mid are assigned to the correct card and the volumes are checked and not lowered.
Check your Multimedia players like Real ONE, WMP, Quicktime and make sure the volume is turned down or muted.