I'm having the same problem...I can connect no problem from Win2K, WinXP, and even Mac OS X clients, but the Win98SE machines connect, verify the username, log on to the network, and then the connection is immediately terminated.
This is Win98SE with DUN 1.4.
The one thing I can think of is that the SME server doesn't serve DHCP to the network I'm trying to connect to -- that is taken care of by a LinkSys router. I've tried setting the IP to a static one in the TCP/IP settings, but it still has the same results. And of course, the other clients all work with IPs from the server.
Any suggestions would be helpful, including log files to look at on the SME server side.
-- Boris