Windows 98 is not officially supported by Sony for the DSC-W35. You can find hacked versions on the web but they may not be stable. You can find a list of supported Operating Systems here at the Sony website.
http://esupport.sony.com/US/perl/swu-list.pl?mdl=DSCW35&LOC=3
I would suggest trying to use the Windows ME drivers. Windows ME was based on Windows 98 so the drivers for most applications are virtually identical. I have used 8 different drivers from other vendors in situations like this and it worked out fine. However, please be aware that since it is not officially supported it can cause interoperability options with your Windows 98 system.
This is the best suggestion I have. By no means should you get Windows ME, it was one of the worst versions of Windows released. Lots of bugs and there are less drivers for this operating system than your Windows 98.
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