I've been actively following lots of 8.6 problems with Office 98/IE/other programs, including many who are experiencing type 3 errors (myself included). I had pretty much given up on finding out what was wrong, but I think I have found a work around.
I had been playing a game which set the colours to 256. No problems at all since then. I mean absolutely none. In fact, I can set the colours to something higher than 256, launch Netscape 4.6, and invariably it will crash with a type 3 error. Set the colours to 256, and everything is fine.
I'd like to see if anyone else has the same experience -- should hold true for Office 98 crashing as well.
-- Boris Mann