Could you have Win98 running in emulation on another machine and access the emulation app with VNC clients? Sort of putting Win98 in a more able wrapper OS that would enable the sharing you need? It seems sort of kludgy though. Personally I might consider getting a cheap box for the person who needs that desktop and running th 98 box headless with VNC server that only accepts one connection (I think that can be done). Are you sure there's no hacks available for your old software that'd eliminate the need for the dongle?

-Zeke