Hi Carl,
Given the amount of memory in the machine, and how little is running at startup, I'd expect the swap file size to be 0, or so.
Remember the documents from the anti-trust trial where MS people were talking about developing new "MIPS-eating" applications so they could sell more Windows licenses? Keep that in mind when thinking about Windows. They want to stress the system so that you feel you have to buy a new machine. :-)
With that in mind, it becomes more understandable that MS likes to maximize the cache size even at the expense of having more stuff in the swap file. NT was notorious for dumping stuff out of RAM to the swap file just to keep a big cache available so that it would seem the system was faster at loading programs.
[link|http://www.epinions.com/content_1812045956|This] post on epinions says that the minimum swap file size should be about 292 MB for Win98. YMMV.
HTH.
Cheers,
Scott.