Windows 98 has an update feature like XP I think, atleast 98SE does. But you'll only be able to get updates for 98 that came out before February or around there, because Microsoft announced that they would not update/develop 98 anymore, unless it has a major flaw. I remember reading that on Yahoo News, but I can't find the link anymore.
To be put plain and simple, Your gonna have to format. You might be able to put the 98SE disc in and do an upgrade, but I'm not sure about that.