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My Windows 98 install took several hours - between the slowness that you are also experiencing, the crashes, errors, unistalls, starting over,...
Just installed the 1940 build, Windows 98SE and Parallels Tools, I installed the printer software for my HP officejet6110 from the original CD...
While installing Win98SE, my mouse (a really old Kensington Orbit) would not respond when I clicked in the VM window until I plugged it directly...