Printer problem

It sounds like you may have quite a bit of work to do.
First, the system restore CD furnished by your OEM may revert your system to
a version without the service packs that were later added.
Often, OEM systems are shipped with installed updates that are not present
on the generic OEM furnished CD(s)
This can be a major matter in terms of time -- obtaining and installing the
updates can take several hours. The lack of the service packs and updates
can impact printing, networking, Internet Explorer, and driver installation,
to name a few areas.
Next, check for a printer driver update, obtain and install it if possible.

There were some systems that had BIOS related problems that surfaced only
when win98 (and SE) had to be reloaded.
The problem was that the bios has a storage area that needed to be
reinitialized, and it wasn't happening. The ultimate cure was to run a bios
utility that is normally used to upgrade the bios. The utility can also be
used to clear the appropriate data area, and allow proper redetection and
initialization when windows and drivers are installed.

A possible simpler path to try is to use safe mode (control panel) to clean
out all duplicate entries that may exist, usually in the system area.
You would be looking mainly for duplicate parallel port or printer related
entries.
It's also possible that win.ini or system.ini are corrupted, due to multiple
incomplete driver install attempts. Manual editing may be a way to cure this
type of a problem. The 98% complete may be occurring due to this type of a
problem.

Any idea why the system froze in the first place?

...