The System Registry will automatically be compressed by Windows ® 98 when it has over 500KB of wasted space in it. Did you know that you can perform the operation manually by going into MS-DOS mode? You can access MS-DOS by going to start, programs and MS-DOS Prompt. The other option you have is rebooting your computer in MS-DOS mode.
You can do this from your DOS prompt by simply entering: SCANREG /BACKUP.
Now, the compression of the registry can be performed by entering: SCANREG /OPT.