Maybe you could try the latest W98 drivers from HP (Compaq) ?
HP V300 drivers
There is also a 'Driver - Display / Monitor' driver listed besides the ATI Rage Mobility Driver.
Can be helpfull to use all the drivers from HP.
[Edit]
On the other hand, I have this baby:
I hook it up on the big telly for the grandkids when they are here.
I've put W2Ksp4 on it with the XP comp rollup.
Runs as a charm, and dosgames runs fine in dosbox. (Now yeah, don't expect something as Duke3D to run in highres in dosbox on that ol'thing, but then you run the winport for those....)
W2K runs better and steadier than W98 and has more possibilities. Another advantage is that the W2K drivers are fully developed and almost bug free by now.
XP: forget it, you would kill your HD (intensive swap file access !!!)