Well the last update to chat was to a different program because the other one we used didn't work for a whole lot of people. Unfortunately, you are running a 10 year old operating system trying to get it to work with software written much more recently.
Microsoft doesn't support Windows 98 since July of 2006
http://support.microsoft.com/ph/1139
And Sun the maker of Java doesn't have a download for Windows98
http://www.java.com/en/download/manual.jsp
Probably the problem is the chat software we run makes use of things in Java that don't exist in the version that is installed on your computer. There is probably no solution other than to try IE and hope that works and if it doesn't, I'm afraid you are out of luck as far as chat goes because you can't get a newer version of Java. Actually I just thought of one other thing. [ saw you tried IE after I posted ]
Here is a list of old Java downloads.
http://oldapps.com/java.htm
I believe some of the 1.5 versions still worked with 98 so you might download one and see if it installs, if not pick and older one. Lather, rinse, repeat. Hopefully one of them might work.
Good luck