No stinkin' services in win98se.. and a 2sec shutdown
Just make sure you understand each and every option in 98lite: If you choose to totally get rid of IE, you lose quicklaunch bar, mshelp plus other things. (you'll need a win95osr2 cd to copy fileexplorer.)
USB for memory sticks is tricky, but you always can force a memorystick to be recognized at card reader (use latest danelec drivers for win98).
USB2.0, well if you can find drivers for your mobo....
Oh, and make sure your frontend / gps apps is designed to work on a 98 machine (Sygic should, as long as dotnet is there).
PS win98se works fine with 512 MB even with a NVIDIA card.