Had a Windows 98 PC that would not validate with the domain controller. Could not determine whether the problem was networking or security. However, the security policy was set to only allow the pc to be used if it validated on the network. Once it had failed there was no way to test whether the networking was up.
To get around this I went into safe mode and searched the registry for 'validated'. I found a key called
HKLM/Network/Logon/MustBeValidated
I set this to 0 and rebooted and I was able to use the computer even after validation failed.
Conclusion: windows 98 security is more of an inconvenience.
Twitterings

Seems that our decision not to allow W98 machines onto the net may not be so silly...