Can you remember if you made any changes to your system, such as installing software or hardware/drivers, or un-installing for that matter, which would co-incide with the beginning of the problem?
Have you done normal system maintenance, such as defragmanting the hard drive? Even though there is a lot of free space, fragmentation can still cause degraded performance. And definitely ensure the system is free of any malware - a virus or spyware program can hit system performance.
Also, it may not relate directly to this problem occurring now, but are you aware there is a Firewire patch for 98SE?http://www.microsoft.com/windows98/downloa...394/default.asp
Part of the stated benefit is: "Large performance improvements, in the order of 300%, have been made over the implementation of 1394 storage drivers in Windows 98 Second Edition." This would indicate Firewire transfer rate with the native 98SE drivers is well under the potential, which could lead to other system weaknesses being more likely to affect your capture.