It's been a while since I played with Win98... I do recall it truncated long Filenames/Paths and it has a Limit to Paths... 64 characters seems to ring a bell but don't hold me to it...

It's possibillity that your path to required files exceed this limit. As a last resort, reinstall PBP and MPLAB in sub-directories whose names are 8 characters or less and whose total path length is no more than three sub-directories deep. If that doesn't work, then an OS upgrade is probably on the cards. Win98 is little more than Win95 with half the bugs removed, and Win95 was really a glorified Windows V3 bolted onto an MS-DOS OS substrate. Both truncate long filenames and paths outside the Windows environment to make them a maximum of eight significant characters in each path segment or filename. It is possible that the latest MPLAB software relies on a more complex path structure which is being altered by the old OS.

Also... I believe the AUTOEXEC paths are only applied when you enter DOS mode not when you run an installed program by clicking on a Menu Line... paths for those can be found by Right-Clicking on the Menu item and opening the Properities option. It's more likely the path theirin is incorrect.