Today I have reinstalled AVG and tried to resolve the startup problem in other way than removeing .VXD's files. After few attempts I think I found solution - just uncheck "Scan Program Files" in Resident Shield. Well, so far everything works good.. So it wasn't problem with .VXD'S - previously I wanted just to remove the problem and that's why I removed all .VXD's.. It worked, but I agree - bad solution.

West: For the question "In what way is it better" you have actually answered.. Win98se is faster, without the whole cosmetic and useless crap and it has ms-dos.. Also the new explorer UI and start menu in XP is much worse and uncomfortable (I know, you can change it.. but they could make something better).. Another thing is startup speed - when I worked on XP on computer as fast as mine, it was working slower than 98se..

You say win98SE is badly coded - I have my Win98SE reinstalled several months ago and so far, I had no errors, hang ups and no problems overall (of course without this one with AVG..).. It's just the way how people use win98SE - if someone install a lot of **** programs and forget to uninstall them, have a lot of programs at startups, don't do spyware and virus check at least once a month than it isn't suprising they have problems with it..